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Interros headed by Vladimir Potanin and UC Rusal of Oleg Deripaska have reached an agreement over the settlement of the shareholder conflict in Norilsk Nickel, which lasted for more than four years with some intervals. Roman Abramovich became a guarantor of the conflict settlement. He did not only buy a 7.3% stake in Norilsk Nickel, but will also acquire the right to manage a 22% stake in Norilsk Nickel.
The Norilsk Nickel main stockholders – UC Rusal of Oleg Deripaska (has a 25.13% stake in the mining metallurgical company) and Interros of Vladimir Potanin (28.1%) – reached an essential agreement over the settlement of a conflict that lasted many years, the companies said in a joint press release on Tuesday. Business tycoon Roman Abramovich acts as a referee in the conflict, the RBC daily reported. Millhouse Capital of Abramovich bought out 7.3% of the Norilsk Nickel quasi-treasury stock (the market price of this stake exceeds two billion dollars). Under the partnership agreement, the remaining 9.7% of quasi-treasury shares are to be cancelled by the mining metallurgical company, so Roman Abramovich will become the third largest shareholder of Norilsk Nickel.
Meanwhile, to fulfil the partnership agreement, the partners will deposit about 22% of Norilsk Nickel shares (by 7.33% shares each party) on a nominated escrow account, contributing in equal parts.
“25% and 28% are the blocking stakes. When each stockholder will deposit 7.3% of shares to a common account, none of them will have the right to block a decision, this rules out possible deadlock situations,” the RBC daily quoted a partner of Yukov and Partners Andrei Yukov as saying. “In all disputable cases Abramovich will take decisions, actually he will become a judge,” he said. The shares, which will be on the nominated escrow account, guarantee some consensus between all three parties, Kirill Chuiko from BCS said. After the cancellation of the treasury shares this stake will make just a third of an aggregate stake of the partners.
Vladimir Potanin will replace Vladimir Strzhalkovsky at the post of the Norilsk Nickel general director. The Norilsk Nickel board of directors is planned to be made more balanced. The board of directors will consist of 13 members: four representatives from Rusal and Interros, two representatives from Millhouse and three independent directors or three representatives from Millhouse and two independent directors. The partners agreed that an independent director should be elected as chairman of the board of directors after the negotiations between the parties to the agreement.
The newspaper recalled that the disagreements between the Norilsk Nickel stockholders arouse after Deripaska’s purchase of a stake in the company in 2008. The disputes also raised over several buy-back, which the mining metallurgical company carried out in 2010–2011.
Alisher Usmanov (his Metalloinvest possesses less than 5% of Norilsk Nickel stock) stated that the agreement was reached behind the closed doors without taking into account the opinion of all stockholders, the Kommersant daily reported. The analysts are unanimous that the reliability of the scheme depends not from the number of stockholders, but form their willingness to come to terms.
The balance of forces in the board of directors and Abramovich’s authority to lift the disagreements between the parties to the agreement turned out to be insufficient, the newspaper noted. Rusal stated in a statement that the key issues in the Norilsk Nickel management (the dividend policy, the amendments in the charter documents, the deals M&A outside Russia, the transactions with securities, the marketing strategy and etc) will be settled with a compulsory accord of all the three parties concerned.
Independent lawyers assess the situation ambiguously. “The advantage is that the interests of all parties concerned are counted in a vital decision making, the disadvantage is that disagreements arise between the parties concerned, the system will just cease to function,” managing partner of the bar Muranov, Chernyakov and Partners Dmitry Chernyakov explained. He added that “Abramovich plays a central role in the agreements,” because three directors, who are his nominees, will make the board of directors “a viable body”. Head of the department of corporative practice Sameta Olga Snitser noted that the similar agreements are not a precedence for Russian business, particularly the similar situation emerged among the TNK-BP stockholders that did not help them to avoid the conflicts, which complicated the operation of the company. The level of risk depends not from a scheme and the number of stockholders, but from their willingness to come to terms, the lawyer explained.