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Norilsk Nickel, Rusal shares slide amid renewed shareholder squabble

The prospects of an old dispute among Russian oligarchs over controlling PJSC Norilsk Nickel Co. being rekindled has seen the company's shares drop, along with United Co. Rusal Plc, Bloomberg News reported Feb. 16.

Rusal President Oleg Deripaska sought an injunction in a London court to stop Roman Abramovich's Crispian Investment Ltd. from selling a portion of its stake in Norilsk, which is the world's largest palladium producer and produces metals including nickel and copper.

Crispian is offering to sell part of its stake, which was about 5% at the start of 2017; the shares are worth more than US$1.5 billion, according to Bloomberg.

Deripaska is concerned that the move could give more power in Norilsk Nickel to rival billionaire Vladimir Potanin, who owns a 30% stake in Norilsk through Interros Holding Co., which told Bloomberg that it had offered to buy the stake held by Crispian.

Lawyers representing Deripaska, Potanin and Abramovich met in court and reached a deal on delaying court proceedings to the week of March 5. Lawyers for Abramovich and Potanin informed the judge that delays would lead to losses, and all parties agreed to try for a quick trial to resolve the matter ahead of a shareholder meeting in June.

Crispian said it had made a counteroffer to both Interros and Rusal so the latter's claim was not justified. Meanwhile, people familiar with the situation said both Interros and Rusal may split the Crispian stake if they are both interested.

Deripaska and Potanin have fought over controlling Norilsk Nickel in the past, with President Vladimir Putin intervening in 2012 by allowing Crispian to buy a small stake in Norilsk on the condition of preventing further clashes between the two Russian billionaires.

Oleg Petropavlovskiy, an analyst at BCS Global Markets, said that under Russian law, Deripaska, who owns about 28% of Norilsk through Rusal, will have to make a mandatory offer for the rest of the company should the stake exceed 30%, Bloomberg added.

However, buying new shares will be difficult for Rusal as the company will have to use debt financing to fund the purchase — a situation further complicated on account of Rusal having US$7 billion in debt on its books already, the BCS analyst added.

"We hope that the ongoing discussions, if they're really taking place, won't in any way interfere [with Norilsk Nickel's development]," a Russian government representative was quoted as saying.