Russia's Nornickel no longer needs shareholder agreement
An eight-year-old shareholder agreement signed by Russian mining giant Norilsk Nickel’s (GMKN.MM) major owners has become a relic of the past which the $44 billion miner does not need, Vladimir Potanin, its largest shareholder.
Potanin's Interros holding, aluminium producer Rusal
(0486.HK) and some other stakeholders signed here the agreement on dividend
payouts to end a previous four-year conflict over the size of dividend
payments, Nornickel's strategy and management.
Potanin said it had now run its course.
“Maintaining this ‘superstructure’ will put even more pressure
on Nornickel with the aim of extracting maximum dividends from it, regardless
of the economic and social situation around the company,” Potanin said in his
strongest public comment on the agreement.
The deal expires on Jan. 1, 2023, with a question over
whether it will be extended or suspended.
“We believe that dividends should not be reduced, but left
in Russia and should be directed towards the development of the Russian
economy, as Rusal does, for example,” Rusal said in a statement.
Rusal, which bought the stake in Nornickel for $14 billion
in 2008, last paid dividends in 2017 when it distributed $300 million to
shareholders.
The agreement gave Nornickel’s shareholders additional tools
to control the company, including a veto for major stakeholders on certain
deals and financial control, as well as installing Potanin as a managing
partner.
Potanin told Reuters in an emailed statement that these
extra tools were not needed for Nornickel’s further development and
modernisation, adding that business efficiency and corporate governance had
improved since 2012.
He did not say whether he was ready to step away from his
role as the managing partner.
Nornickel’s market value has risen by 50% since 2012.
However, the company has been hit by lower demand for
commodities this year due to COVID-19, which led some of its peers to reduce
dividends, and a big fuel spill at an Arctic power plant in late May.
After the spill, Potanin, who owns a stake of 34.5%, proposed
capping the company’s final 2020 dividend at $1 billion, while Rusal, which
relies on dividends from its 27.8% stake in Nornickel, called for a management
overhaul.
“Today, the vision of Interros and Rusal regarding the
principles of governance in Nornickel is fundamentally different,” Potanin
said.
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