United Co. Rusal won’t block a cancellation of shares that OAO GMK Norilsk Nickel will repurchase from investors, even as the world’s biggest aluminum producer says the deal benefits a rival shareholder, billionaire Vladimir Potanin’s Interros.
“We consistently supported the idea of cancellation of treasuries and this time is no exception, though we understand that Interros will benefit from it,” Deputy Chief Executive Officer Maxim Sokov told reporters by phone today. The buyback is structured to benefit Interros, giving it the opportunity to sell as many shares as possible, Sokov said.
Norilsk will cancel repurchased shares if Rusal doesn’t block the deal, Potanin said in interview yesterday.
Sokov said Norilsk should get approval from the Russian government on the planned $4.5 billion buyback under the strategic companies law. Norilsk’s buyback is being carried out by foreign-registered units, which will cross a 10 percent threshhold for ownership, which requires special permission.
Erzhena Ishenko, Norilsk’s spokeswoman declined to immediately comment.
The nickel company’s unit Norilsk Nickel Investments Ltd. began a monthlong program yesterday to repurchase 7.71 percent of the stock for as much as $306 a share, or $30.60 a depositary receipt. The buyback has drawn criticism from Rusal, the owner of a 25 percent stake as the company is locked in a long term dispute with Interros for the control.
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