Norilsk Sells $3.5 Billion Stake to Trafigura Amid Owners' Feud

Bloomberg Dec 21----OAO GMK Norilsk Nickel, the mining company whose largest holders are locked in a dispute, agreed to sell $3.5 billion of stock to commodities trader Trafigura Beheer BV as analysts signaled a possible end to the feud.

Norilsk will sell an 8 percent stake in the form of American depositary receipts to gain funds for “general purposes,” the Moscow-based company said yesterday in a statement. Trafigura has no plans to increase its holding to more than 10 percent, Norilsk said.

Billionaire shareholders Oleg Deripaska and Vladimir Potanin have bickered over influence on Norilsk’s board and use of cash in a feud dating back to 2008. Norilsk last week offered $12 billion to buy back the 25 percent stake held by Deripaska’s United Co. Rusal, and yesterday’s accord would provide cash for such a deal, according to Nomura Holdings Plc.

“The sale of treasury stock may indicate that Norilsk is going ahead with its plan to buy out” Rusal, said Vladimir Zhukov, an analyst at Nomura in Moscow. Selling 8 percent would also keep Norilsk below the 30 percent threshold that triggers a mandatory offer to minority holders, he said.

While Rusal rejected Norilsk’s bid, analysts including Zhukov said the aluminum company may stand to benefit from such a deal. “It’s a very attractive price,” Zhukov said Dec. 16.

No Discussion

“We are concerned that an asset worth over $3.5 billion was monetized without discussion and voting at the board,” Rusal said yesterday in a statement. “Moreover, the stake was sold to Trafigura, a company which is a direct competitor of Norilsk Nickel for marketing and sales of its metals.”

Trafigura, based in Amsterdam, is the world’s second- largest trader of non-ferrous metals.

The sale to Trafigura could presage an “ultimate acquisition of Rusal’s stake in Norilsk,” whereby Trafigura provides funding for Norilsk’s bid, said Erik Danemar, an analyst at Deutsche Bank AG in Moscow.

Maria Uvarova, a spokeswoman for Norilsk, declined to comment. A Trafigura spokesman also declined to comment.

“We consider Trafigura to be an important industry investor in Norilsk Nickel,” Norilsk’s press service said yesterday in an e-mail. “Selling a stake to Trafigura further strengthens our partnership.”