Russia's Nornickel plans share purchase as part of employee incentive scheme

MOSCOW (Reuters) -Russian mining group Norilsk Nickel has set out plans for the purchase of billions of roubles of Nornickel shares as part of an employee incentive scheme, following a commitment by biggest shareholder Vladimir Potanin to raise staff participation.

Potanin said in September the company planned to increase the equity holdings of employees and other individuals to collectively comprise 25% of the company, up from 10% at that time.

Under Friday's plan, a company called Digital Assets LLC - closely associated with Potanin - will buy up to 0.27% of Nornickel's share capital, worth around 6.3 billion roubles ($77.3 million) at Thursday's closing price. Nornickel declined to disclose who was financing the scheme.

Nornickel said Digital Assets would acquire no more than 407,344 of its ordinary shares between May 1, 2023, and Dec. 31 2023.

The share distribution will then be carried out via the issue by Digital Assets of tokens called MineTokens for the value of the shares in question, which will be equal to Nornickel's Moscow Exchange share price and will allow holders to receive dividends.

Employees that have been at Nornickel for more than a year will receive between two and 10 tokens, depending on their seniority. The programme involves a one-year lock-up period, during which time the tokens cannot be sold, with redemption possible after five years.

Nornickel gave no reason for opting for digital tokens rather than shares or options, but Potanin has previously touted the "era of tokenisation" and his Interros Holding is an investor in Russian blockchain firm Atomyze, which has regulatory approval to exchange digital assets.

"This is a pilot project, and if employees are interested in this instrument, a continuation of the programme may be considered," Nornickel said.

Nornickel shareholder Rusal previously said, in an interview with Kommersant daily, that it was not clear who will own these shares and their voting rights. Nornickel declined to comment on this issue. 

According to Interfax news agency's SPARK database of Russian companies, Digital Assets' major shareholders are Rosbank, another company ultimately owned by Potanin, and SD Partner LLC, in which Rosbank holds a 19% stake.

When Nornickel, the world's top palladium and refined nickel producer, was privatised during the post-Soviet carve-up of Russian industry in the 1990s, employees owned around 25% of shares.

($1 = 81.5000 roubles)

(Reporting by Anastasia Lyrchikova; Writing by Alexander Marrow; Editing by Gareth Jones and David Holmes)

By Anastasia Lyrchikova and Alexander Marrow