UC Rusal refuses to discuss the possibility of buying out or selling a stake in Norilsk Nickel to another major shareholder of the company, Vladimir Potanin, according to a report from the aluminum producer.
"In connection with the inclusion in the sanction list of the US Treasury (OFAC), the company believes that the request for a mandate regarding the potential procedure to shoot out (" Russian roulette "in respect of the shares of Norilsk Nickel) currently does not meet the interests of the company and shareholders, in a message on behalf of the Board of Directors of Rusal.
Rusal can return to the discussion of this issue, when it will meet the interests of the group and its shareholders, the report said.
"Russian roulette" is a mechanism for resolving disputes, when one shareholder can offer another to buy out its shares with a specified premium to a weighted average share price or sell their securities at a proposed or higher price.
With the help of this mechanism, Rusal, which owns a 27.8% stake in Norilsk Nickel, expected to buy out the share of another large shareholder, Vladimir Potanin, whose structures own 32.9%. The fact that Rusal intends to vote on the issue of shareholders to buy or sell the stake in Vladimir Potanin in Norilsk Nickel or sell it at a higher price, it became known on February 20. Three days later the company officially confirmed its intention to ask its shareholders for a mandate for "Russian roulette".
On March 9, the representative of the company confirmed to RBC that the probability of launching this mechanism remains. As RBC previously wrote, according to the agreement between Potanin and the owner of Rusal Oleg Deripaska, such a mechanism for resolving disputes was laid even more than five years ago.
In early April, the US Treasury introduced Oleg Deripaska and its controlled companies, including Rusal, to the US sanctions list.
Corporate "Russian roulette"
One of the shareholders can offer another to buy out its share at a weighted average price for half a year with a 20% premium. The other can either accept the offer, or buy the partner's share for the same price, or call a higher price for his package. The roulette initiator in return can either buy the partner package at a new price, or present its package to the buy-out. Refusal of the "Russian roulette" can be interpreted as a violation of the shareholder agreement, and the package of "offender" is redeemed by the second party at a price of $ 1 per share.
Deripaska and Potanin abandoned the "Russian roulette" in "Norilsk Nickel"
They will not repurchase shares from each other
Vedomosti, April 13, 2013
UC Rusal will not launch the mechanism of "Russian roulette", which allows you to buy out the share of another shareholder in Norilsk Nickel.
In connection with the inclusion of the company in the SDN list by the US Treasury, UC Rusal recalls the mandate allowing the board of directors to begin preparations for the procedure of "Russian roulette", Oleg Deripaska's company reported on Friday, April 13. In the circumstances, the launch of "roulette" does not meet the interests of UC Rusal and its shareholders, but the company will continue to monitor the situation and may restart the process of preparing the mandate, when this will meet the interests of UC Rusal and its shareholders, the report said.
Also on Friday, the president of Norilsk Nickel, Vladimir Potanin, told the Financial Times that he was against the resolution of the share conflict in Norilsk Nickel with the help of the "Russian roulette" mechanism.
"The fate of such a company as Norilsk Nickel is of great importance for the country's economy, it should not be decided by playing roulette," he said.
Representatives of Norilsk Nickel and Interros Vladimir Potanin (Interros structure owned by 32.9% of Norilsk Nickel) declined to comment, UC Rusal (27.8% of Norilsk Nickel) did not answer the questions.
In the "Norilsk Nickel" since the beginning of the year, a conflict broke out between UC Rusal and Interros. The reason was the desire of another major shareholder - Crispian Roman Abramovich and Alexander Abramov - to sell the bulk of his stake: 4% of 6.2%. Initially, one of Potanin's structures sent a proposal for the repayment of such a share. Crispian, by agreement of shareholders, offered the same package to UC Rusal on the same terms. UC Rusal, however, felt that the deal could change the balance of power in Norilsk Nickel. Now the company is contesting in the High Court of London a deal to sell a 4% stake.
From the testimony of the parties to the lawsuit it became clear that Potanin and Deripaska did not agree that it was better: to finance new investment projects against the backdrop of an unstable metals market or pay dividends. In March, the parties managed to agree on closing the transaction for the purchase of 2.1% of Norilsk Nickel by Whiteleave from Interros group from Crispian.
In March, UC Rusal planned at an extraordinary meeting of shareholders to present a circular describing the conduct of the "Russian roulette" in the fight for shares of Norilsk Nickel. The company did not do this, postponing the release of the circular until April 30 to "finalize the content and include the necessary information in the circular."
The essence of the "Russian roulette" is as follows. Companies Deripaska or Potanin can offer each other to sell shares of Norilsk Nickel on a weighted average for half a year price with a 20% premium. The party that received the offer can accept it, offer the roulette initiator to sell its package for the same price or raise the price. In the latter case, the initiator of the duel should buy a stake at a new price or sell his package.