Norilsk Slumps Most in Month on Dividend Concerns: Moscow Mover

OAO GMK Norilsk Nickel fell the most in a month as investors bet the world’s largest producer of the metal may pay smaller dividends than expected.

Norilsk retreated as much as 3.3 percent before closing down 2.1 percent at 5,266 rubles by the close in Moscow, the biggest drop since Nov. 13. The amount of shares traded was 853,450, equivalent to 2.5 times the three-month average. The stock’s 10-day volatility surged to 38.646, the highest since March 6, according to Bloomberg data.

The shareholders agreed that Norilsk may distribute at least $9 billion in dividends over three years, three people familiar with the matter, who asked not to be identified because the plan isn’t public, said today. That’s down from an initial projection of more than $10 billion that the three people gave last week. The figure is lower because the final agreement has Roman Abramovich buying stock from shareholders and not treasury stock from the company.

“There is no mention” in the statement of a “dividend policy or dividend payouts, a factor that has driven up Norilsk shares in recent days,” Barry Ehrlich, an analyst at Alfa Bank, said in an e-mailed report.

Abramovich’s Millhouse LLC will hold 5.87 percent of Norilsk after the world’s top supplier of nickel and palladium retires treasury stock equal to 17 percent of the company, United Co. Rusal and billionaire Vladimir Potanin’s Interros holding said in a joint statement today. Rusal, Interros and Norilsk today declined to comment on dividend talks. Treasury stock refers to shares of issued stock reacquired by the issuing company and held by it.

Norilsk shares surged 6.3 percent on Dec. 5, the most since July 16, after Norilsk’s billionaire shareholders were said to be planning $10 billion in dividends.

Had Abramovich bought treasury stock, Norilsk would have had to report a loss from its buyback program “because it paid $250 to $300 per share last year,” Nikolay Sosnovskiy, a metals analyst at VTB Capital in Moscow, said by phone today.

To contact the reporter on this story: Ksenia Galouchko in Moscow at kgalouchko1@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net

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