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The Buzz Barometer: Norilsk Nickel Feud Over?
December 8, 2012 21:55

This week’s press has been quite Russia-oriented, with Norilsk Nickel attracting most of the focus.

The ceasefire between its two major shareholders, Potanin and Deripaska, brokered by another tycoon, Abramovich, has pushed the company’s shares up by left analysts wondering how long will the détente in the power feud over the world’s biggest nickel and palladium producer last.

The Guardian reminds its readers that Norilsk Nickel was one of the biggest trophies in the 1990s when Russian industry was a cake sliced and shared to loyal businessmen.

According to it, the winner of the deal is Abramovich, a co-owner of Evraz, among the FTSE 100-list, and of course, and owner of FC Chelsea, who will see his position strengthened.

Rusal expects to see more dividends coming from Norilsk Nickel to ease its $10.7 billion debt burden, says the Guardian.

In a blog with the Financial Times, Stefan Wagstyl sarcastically notes that ‘the hatchet is, at best, half-buried’. His critical overview appears to be on the best pieces on this news, with a warning to minority shareholders to be on their guard and a relevant point about the removal of burly Vladimir Strzhalkovsky as the company’s CEO, something Derispaska has been long calling for.

According to Wagstyl, the deal comes at the right time – just before the legal action in London was about to begin – helping oligarchs to avoid another another public washing of Russia’s dirty corporate laundry, referring to the recent Abramovich versus Berezovsky case.

He also points out that possible ‘violations’ mentioned in the press release that could lead to half a billion fine have not been explained, meaning there is still a lot of uncertainty about the real terms of the truce.

The Independent calls Abramovich the ‘white knight’ or a ‘buffer’ quoting a metals analyst from Société Générale, Sergey Donskoy, who predicted a ‘re-rating’ if this shareholder deal will be converted into ‘more effective management’.

The Industry Leaders magazine gives the long list of the Kremlin’s attempts at ending the corporate battle between Deripaska and Potanin, which ‘paralyzed company’s operations and held back the development of the miner’.

Reuters runs an in-depth story about the peace deal, with some background. According to it, Norilsk has historically been linked to the Kremlin – ever since it hosted the Norilsk Correctional Labour Camp established in 1933 by NKVD, before it was transformed into the KGB.

Reuters’ Andy Home argues that bringing in a third tycoon to reign in the two warring parties is ‘a very Russian solution’. With a Kremlin favourite becoming ‘de facto controller of the board’, he says it’s Kremlin 1-0 Transparency. 

The American Lawyer offers a glimpse into how and by whom such high-level deals are usually brokered.

According to it, Herbert Smith Freehills’ corporate partner Tomasz Wozniak in Moscow advised Interros on this week's tentative settlement.

Alexey Kiyashko, a corporate finance and cross-border M&A partner at Skadden, Arps, Slate, Meagher & Flom is leading a team advising Abramovich on the deal, it says.

The American Lawyer says that Rusal was represented by Russian firm Egorov Puginsky Afanasiev & Partners. Afanasiev has also been a member of the Rusal board of directors since March 2007.  

http://www.guardian.co.uk http://www.reuters.com http://www.industryleadersmagazine.com




Author: Mikhail Vesely

Tags: Norilsk Nickel Rusal Interros Abramovich Deripaska 

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