Russian billionaire Vladimir Potanin has decided not to take part in a buyback of Nornickel shares, his Interros Holding said on Friday, increasing the proceeds of aluminium producer Rusal from the deal.
Potanin owns a 34.6% stake in Nornickel, which plans to buy up to 3.4% of its shares for $2 billion, in partial compensation for a smaller than expected 2020 dividend.
Potanin’s stake in Nornickel, a leading nickel producer and the world’s largest producer of palladium, will rise after the buyback as the miner will cancel all of the shares it purchases, excluding 0.5% to be kept for an employee programme.
The increase of Interros’s stake in Nornickel is in line with its long-term strategy as Nornickel is undervalued from its point of view, the holding said in a statement.
Rusal, the second largest shareholder at Nornickel with a 27.8% stake, applied to take part in the buyback in June, adding that its stake in Nornickel would remain above the blocking 25%+1 share.
Interros’s decision not to participate in the buyback increases Rusal’s future proceeds from the deal to $880 million from the $576 million it would get in case Interros applied for the programme, analysts at Sova Capital said in a note.
The calculation is based on 100% participation from Nornickel’s minority shareholders, Sova Capital added.
Nornickel’s board of directors will review the results of the buyback on June 22. The payment is expected by July 3.
(By Polina Devitt; Editing by Louise Heavens and Barbara Lewis)