Abramovich's Company Seeks to Buy $158 Million Norilsk Stakeby
Norilsk Nickel's board to review offer at April 18 meeting
The 0.79% of total shares is currently held as treasury stock
Crispian Investments Ltd., controlled by billionaire Roman Abramovich and his partners, asked GMK Norilsk Nickel PJSC to consider selling stock valued at $158 million.
The stake, totaling just over 1.25 million shares, or 0.79 percent of Norilsk’s total equity capital, was purchased by the nickel producer as part of a buyback program last year and is currently held as treasury. Norilsk’s board is reviewing the stock sale, the company said in a statement.
Abramovich and his partners, including Evraz Plc co-owner Alexander Abramov, became shareholders in Norilsk amid an agreement in 2012 that ended a four-year feud between billionaire investors that President Vladimir Putin urged them to resolve. Crispian owns about 5.5 percent of Norilsk, Russia’s largest mining company.
Norilsk fell 12 percent in Moscow in the past year as nickel prices slid by almost a third. The metal, used in stainless steel, touched the lowest in more than a decade in February. The board approved a new dividend policy on Monday that allows the firm to cut dividends when market conditions warrant, a plan that won backing from Moody’s Investors Service and Standard & Poor’s.
"The deal would be quite beneficial as Norilsk is a good investment and it still will pay high dividends even if it plans to cut them," Kirill Chuyko, an analyst at BCS Global Markets, said by phone from Moscow.
Norilsk’s press service declined to comment before the board considers the proposal from Crispian on April 18. A representative for Abramovich declined to comment.
Under the new dividend program, payments will be linked to Norilsk’s debt-to-earnings ratio and when the multiple rises as earnings fall, the payout will be reduced. The revision will be applied to 2016 dividends.
Chief Executive Officer Vladimir Potanin controls about 30 percent of Norilsk. United Co. Rusal holds about 28 percent.