Deripaska, Potanin Reach Norilsk Accord, End Feud

Nov. 25 (Bloomberg) -- OAO GMK Norilsk Nickel investors Oleg Deripaska and Vladimir Potanin agreed on a strategy for Russia’s biggest mining company, ending a seven-month feud. The global financial crisis prompted the billionaires to resolve their differences, Potanin said today at a briefing in Moscow also attended by Deripaska, Russia’s richest man. They will have four seats each on a new Norilsk board of directors, which will be selected next month, and the government will have one, Potanin said. “The state didn’t interfere, but it was obvious that it was irritated by our feud,” Potanin told reporters. The government isn’t trying to take control, Deripaska said. Deripaska had sought to combine Norilsk with his United Co. Rusal, the world’s largest aluminum producer. Potanin said as recently as August he planned to add coal, copper, iron ore, potash and uranium assets. Since then, commodities prices and Russian stocks have plunged, slashing the value of the billionaires’ investments. “Any settlement between the shareholders is welcome,” said Alexandre Starinsky, who helps manage $300 million at the Kaltchuga Fund in Moscow. Both men said they agreed on Norilsk’s merger strategy, financing and dividend policy, without giving further details. A combination of Norilsk and Rusal won’t be considered for the next three years, Potanin said. Metalloinvest Talks Potanin had previously said he would seek to reach an accord with OAO Metalloinvest, the iron ore producer controlled by Alisher Usmanov. Deripaska said today he doesn’t oppose Norilsk talking to Metalloinvest about a merger. The state will take a more active role at Moscow-based Norilsk and a government representative will be appointed chairman. Norilsk will hold a shareholder meeting on Dec. 26 to elect an expanded board of 13 directors. Candidates will be put forward by Dec. 1. “During a crisis it’s difficult to do without government aid,” Potanin said. “During this period, a greater involvement by the government in the management of the company is justified, and we see it as positive.” Deripaska said Rusal plans to repay in 2009 a $4.5 billion loan the state gave the aluminum company to pay off foreign creditors. The loan was secured against Norilsk shares. Norilsk plans to complete a $2 billion buyback of its shares. The buyback was halted this month by a Siberian court after Rusal filed a suit, Potanin said. “Norilsk has enough resources and enough financial stability to honor its commitments, including the buyback,” Potanin said. Vladimir Strzhalkovsky, Norilsk’s fourth CEO in 18 months, will remain in his post, Potanin said.