Nornickel board calls on shareholders to discuss proposed change to dividend policy

Norilsk Nickel CEO Vladimir Potanin. (Image courtesy of The Kremlin.)

The board of Russia’s Norilsk Nickel called on shareholders to discuss a proposed change to its dividend policy as the palladium and nickel producer looks to invest more in production and environmental protection after a major fuel spill in the Arctic.

Nornickel, the world’s largest producer of palladium and a leading producer of nickel, has been fined $2-billion for the damage caused by the spill last year in the country’s worst environmental disaster in the Arctic.

Nornickel’s dividend policy is set under an agreement between Interros Holding, controlled by businessman and Nornickel chief executive Vladimir Potanin, and aluminium producer Rusal.

The statement indicates that no final decisions have been made on Monday, when Nornickel’s board met to discuss its 2030 investment programme and dividend targets.

The meeting was initiated by Interros, which last week proposed changing Nornickel’s dividend policy in a move that would lower payouts to help fund planned investment in production growth and improving its environmental footprint.

Interros proposed minimising the final dividend for 2020 and linking future payments to free cash flow (FCF) instead of earnings before interest, tax, depreciation and amortisation (EBITDA).

Nornickel said in the statement that its management presented to the board a financial model, which assumes that if Nornickel choose to start paying 50-75% of its FCF in dividends, this would ensure Nornickel’s sustainability in the longer term.

(By Polina Devitt; Editing by Louise Heavens)

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