Rusal will earn $ 1.4 billion from the buyback of Norilsk Nickel // Its stake in MMC after the cancellation of shares may decrease to 26.4%

Shareholders of Norilsk Nickel presented 40.6% of the capital for redemption, which is more than the buyback conditions, as a result, the redemption of shares will be carried out proportionally. Rusal, which has submitted its entire stake for buyback, will be able to earn $ 1.4 billion from the sale of part of its shares at the current exchange rate and will maintain the current level of representation on the board of directors. After the buyback, the treasury shares will be mostly redeemed. As a result, Rusal’s share in Norilsk Nickel will decrease to 26.4% from the current 27.8%, while Vladimir Potanin’s Interros, who did not participate in the buyback, will increase its stake to 35.8% from 34.6%.

Shareholders of Norilsk Nickel presented 64.2 million shares of the company for buyback, which is 40.6% of the capital, as part of the buyback program, the MMC said in a statement. According to the buyback conditions, the buyback is carried out at a price of 27.7 thousand rubles. per share, and its total size cannot exceed $ 2 billion (3.4% of the authorized capital, or 5.382 million shares). After the buyback, the repurchased shares will be mostly redeemed, which partially compensates for the decrease in the shares of those shareholders who participated in the buyback.

Since the volume of shares presented for redemption exceeds the maximum buyback size, the redemption will be carried out proportionally with a coefficient of 0.08383985056.

Rusal offered to buy out the entire 27.8% stake (44.03 million shares). Based on the formula, 3 million 691 thousand 465 shares will be purchased from the company. As a result of the buyback, Rusal’s stake will amount to the expected 25.5%. The company could receive $ 1.4 billion at the current exchange rate. “The representation of Rusal on the board of directors of Norilsk Nickel will remain unchanged,” the press service noted.

Crispian Roman Abramovich and Alexander Abramov before the buyback owned a 4.7% stake, or 7 million 437 thousand 537 shares. According to Kommersant’s information, they presented the entire package for ransom.

As a result of the buyback, 623 thousand 561 shares may be purchased from them. As a result, the share of Crispian after the buyback may reach 4.3%.

Now Rusal’s share in the mining and metallurgical complex is 27.8%, Vladimir Potanin’s Interros – 34.6%, Roman Abramovich and Alexander Abramov’s Crispian – 4.7% of the shares. After the cancellation of the shares (except for 0.5%, which is supposed to be directed to the management incentive program), Rusal’s share will be 26.4%, Interros – 35.8%, Crispian – 4.4%.

Vladimir Potanin’s Interros refused to participate in the buyback, citing the great potential of the company’s shares. The general director of Interros, Sergei Batekhin, announced on June 18 that the company intends to invest in the mining and metallurgical complex, and not sell its shares.

Thus, Rusal will become the main beneficiary of the buyback. The company will retain a blocking stake and representation on the board of directors of Norilsk Nickel, and will also receive money for an investment program. “In particular, the company is completing the construction of the Taishet aluminum plant, and is also preparing for the restructuring of the Krasnoyarsk, Irkutsk, Novokuznetsk and Bratsk aluminum plants, which will require $ 5 billion (see Kommersant, May 17).

Evgeny Zainullin

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