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MINING AND METALLURGICAL COMPANY NORILSK NICKEL

(GMKN)
  Report
End-of-day quote Moscow Micex - RTS  -  2022-07-07
16720.00 RUB   +1.03%
09/28Nornickel's board of directors decided to hold extraordinary general meeting of shareholders
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09/19Norilsk Nickel Puts Rusal Merger Talks on Halt
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09/19Russian Mining Group Nornickel Plans Hiking Employees' Stake to 25%
MT
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Potanin seen as major obstacle to Russian $60bn metal merger

07/06/2022 | 07:39am EDT
FILE PHOTO: St. Petersburg International Economic Forum (SPIEF)

LONDON (Reuters) - Russian businessman Vladimir Potanin is likely to be the biggest barrier to a potential $60 billion merger between Russia's largest metals producers Nornickel and Rusal, two sources with direct knowledge of the matter said.

Potanin has said a tie-up could strengthen the companies' defences against any sanctions the West might impose on them, and in an interview with Russian media indicated he would not step down as CEO.

The two sources, asking not to be named because of the sensitivity of the issue, said any deal was unlikely as long as Potanin remained Nornickel's boss and major shareholder.

"Until he bites the bullet, steps down as CEO and sells down his stake to become a minority shareholder, no deal is possible," one of the sources said.

"Even if the companies are not under international sanctions, there will be a de facto global international finance ban on them as a result of the UK sanctions on Potanin".

Britain last week placed sanctions on Potanin.

Neither company has been directly targeted by Western sanctions imposed on Russia over the war in Ukraine, but Rusal was subject to U.S. sanctions between April 2018 and early 2019 until its founder Oleg Deripaska agreed to relinquish control.

The Interros Group, which manages Potanin's assets, and Rusal's majority shareholder EN+ Group did not comment. Rusal did not respond to a request for comment.

Rusal is the world's largest aluminium producer outside China, while Nornickel's palladium and nickel account for 40% and 7% of global mined supplies respectively.

Adding weight to Potanin's comments in this week's interview that a merger could offer shelter from sanctions, analysts say the combined clout of the two companies, most of whose customers are in Europe and the Americas, would leave the West wary of sending prices soaring for metals that are critical to its own industries.

Already energy prices have hit record levels in Europe following the West's efforts to wean itself off Russian gas.

The London Metal Exchange is looking into what UK sanctions on Potanin mean for it, its participants and for Nornickel's brands traded on the bourse.

INTERTWINED AND EDGY

The two producers are intertwined because Potanin and Rusal own 36% and 26% respectively of Nornickel.

Relationships between the two sides, however, have long been marked by disputes and it is unclear whether a new agreement can be reached on dividend payouts once the existing deal expires on Jan. 1, 2023.

"A merger could discourage Nornickel from paying dividends in the coming years," said Kirill Komarov, an analyst at Tinkoff Investments.

Potanin, Rusal and other Nornickel shareholders in 2012 signed the existing 10-year agreement on the size of the payouts to end a previous long-standing dispute.

A third source with direct knowledge said they were unaware talks were taking place and that Potanin's interview was posturing ahead of negotiations to replace the dividend payment agreement once it expires.

(Reporting by Clara Denina and Pratima Desai; editing by Barbara Lewis)

By Clara Denina and Pratima Desai


© Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
MINING AND METALLURGICAL COMPANY NORILSK NICKEL 1.03% 16720 End-of-day quote.-26.76%
PALLADIUM -0.70% 2198 Delayed Quote.8.76%
S&P GSCI ALUMINUM INDEX 0.82% 140.2117 Real-time Quote.-24.66%
UNITED COMPANY RUSAL, INTERNATIONAL 0.63% 3.21 Delayed Quote.-56.29%
US DOLLAR / RUSSIAN ROUBLE (USD/RUB) 0.74% 57.1679 Delayed Quote.-22.40%
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Financials (USD)
Sales 2021 17 852 M - -
Net income 2021 6 512 M - -
Net Debt 2021 4 952 M - -
P/E ratio 2021 7,30x
Yield 2021 20,1%
Capitalization 40 553 M 43 753 M -
EV / Sales 2020 3,55x
EV / Sales 2021 2,90x
Nbr of Employees -
Free-Float 34,3%
Chart MINING AND METALLURGICAL COMPANY NORILSK NICKEL
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Mining and Metallurgical Company Norilsk Nickel Technical Analysis Chart | MarketScreener
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Income Statement Evolution
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Mean consensus -
Number of Analysts 0
Last Close Price 16 720,00
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Managers and Directors
Vladimir Olegovich Potanin President & Chairman-Management Board
Sergey Gennadyevich Malyshev Chief Financial Officer & Senior Vice President
Andrey Bougrov Senior Vice President-Sustainable Development
Sergey Stanislavovich Stepanov Operational Director & Senior Vice President
Evgeny Arkadievich Shvarts Independent Director