"The threat of constant conflict for control in Norilsk Nickel creates a negative impression among investors," said Vladimir Potanin, the largest co-owner and CEO of Norilsk Nickel, at a meeting with Oleg Deripaska, the main shareholder of UC Rusal. It was held on December 1, 2017. The businessmen discussed the principles of managing the company after the five-year period expired, during which the parties had no right to sell their shares in Norilsk Nickel. This follows from the materials of the High Court of London, where on Tuesday, February 27, proceedings began on the suit of UC Rusal against other co-owners of Norilsk Nickel - Crispian Roman Abramovich and Alexander Abramov (6.3%) and Whiteleave Potanin (30.2%) . UC Rusal has 27.8% of Norilsk Nickel. The aluminum producer is trying to block the sale of Crispian most of its package - 4% - to the Potanin structure.
At the meeting, as follows from the materials of the court, Potanin asked Deripaska for an option to 2.8% of Norilsk Nickel, according to which Potanin's structure could buy this package. Potanin noted during the talks that he agreed to set a minimum dividend margin of $ 1.5 billion per year, as well as change the basis for their calculation: pay them not from EIBTDA, as now, but from free cash flow.
Decrease in the share of UC Rusal to blocking (25%) would mean Deripaska's refusal to unite UC Rusal and Norilsk Nickel, two Vedomosti's interlocutors said, close to the different shareholders of Norilsk Nickel. The businessman repeatedly expressed this idea in 2008-2012.
In return, Deripaska offered Potanin to grant UC Rusal an option giving the right to sell his stake in Norilsk Nickel entirely. Such a mechanism would allow Deripaska to defend its positions if Potanin violated the terms of the shareholder agreement after the purchase of the shares of Abramovich and Abramov.
In addition, Deripaska insisted on increasing dividend payments to $ 2.5 billion a year. Interros believes that this would increase the financial risk. The remaining funds after the payment of dividends would not be enough to maintain the company's work, the court said.
The dispute between the parties has already gone very far. It came to the point that UC Rusal asked shareholders to have a mandate for the board of directors to launch the procedure of "Russian roulette" in Norilsk Nickel. It provides for the possibility of a buyout by one partner of a share of another at a price not lower than the weighted average for half a year with a 20% premium.
The main dispute in Norilsk Nickel is still not for the redemption of shares, but for dividends, says Maxim Khudalov, an analyst with ACRA. Now, Norilsk Nickel's dividends can range from 30% EBITDA (if the debt burden is above 2.2 EBITDA) to 60% (if it is below 1.8 EBITDA). EBITDA of the company for the first half of 2017 (more relevant data is not available) was $ 1.7 billion. Free cash flow during this period was only $ 500 million, according to Norilsk Nickel.