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Rusal, Partners Ready to Buy Out Potanin From Norilsk

United Co. Rusal is ready to buy out the stake in OAO GMK Norilsk Nickel held by Vladimir Potanin’s Interros Holding Co. to end a shareholder dispute and boost the value of Russia’s biggest mining company.

Norilsk Nickel would be able to “significantly” raise its market value in six months with more efficient management and by selling underperforming assets, Rusal Chief Executive Officer Oleg Deripaska told reporters today in his Moscow office. Such assets include U.S. precious-metals producer Stillwater Mining Co., utility OAO OGK-3 and treasury stock, he said.

Rusal, which owns 25 percent of Norilsk, wants to replace the nickel producer’s management, Deripaska said. The billionaire is challenging a June 28 election that gave board control to Interros and Norilsk executives.

“We disagree with these groundless accusations,” Norilsk Nickel said today by e-mail. Interros hasn’t received a proposal from Rusal offering to buy its stake in Norilsk, a press official, who declined to be identified citing company policy, said by phone.

Interros owns at least 25 percent of Norilsk after Potanin’s former business partner Mikhail Prokhorov sold his stake to Deripaska in 2008. Interros gained control of Norilsk through state asset sales in 1995-1997.

Buyback, Dividend

Rusal is disputing the board election, saying Potanin’s Interros had agreed in 2008 to support its nominee for board chairman, Alexander Voloshin, ex-chief of staff to former presidents Boris Yeltsin and Vladimir Putin. Interros has said Rusal failed to garner enough votes to re-elect Voloshin.

Deripaska says he’s concerned Interros has enough influence on Norilsk’s board to pass a share buyback, after the board approved dividends of $1.33 billion.

Deripaska said he opposes a share buyback for Norilsk and sought dividends of $3 billion for last year during discussions with Interros in April. The Interros official said different options have been discussed for distributing profits and declined to elaborate.

Rusal will call an extraordinary meeting of Norilsk shareholders, seeking to re-elect the board as soon as it prepares legal documents to force Interros to vote in accordance with a 2008 shareholder agreement, Deripaska said. Restoring Voloshin to Norilsk’s board will require approval of 50 percent of shareholders who attend, Maxim Sokov, Rusal’s head of strategy, said.

“We have held in-depth talks with a large number of Norilsk minorities, investment funds and received their support,” Deripaska said.

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