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Interros Holding

Interros Holding
Based in Moscow
Active in Russia, Ukraine
Targeted base metals, precious metals

Interros Holding, as of 28 February 2008, became wholly-owned by Russian billionaire “oligarch” Vladimir Potanin, and is the holding company for Norilsk Nickel (see also KM-Invest).

Norilsk is Russia's largest mining enterprise, and the world's biggest supplier of platinum.

In April 2008, Oleg Deripaska of UC Rusal finalised a long-delayed acquisition of 25% (plus one share) of Norilsk, thus presaging a possible takeover of the world’s premier nickel mining company [Telegraph, UK 24 April 2008].

A year later, Potanin had reduced his own 29.8% stake in Norilsk to the same 25 percentage (plus one share) [MJ 24 April 2009].

Just over a year later, Deripaska appealed to the London Court of International Arbitration (LCIA) against Interros' alleged over-bearing control of Norilsk, claiming that Potanin had failed to allow US Rusal to appoint an equal number of independent directors to the company's board, and to "create clear and transparent mechanisms", ensuring the board's independence [MJ 13 August 2010].

In October 2010, Deripaska failed to secure a vote by a majority of Norilsk's shareholders to re-appoint the company's board [FT 21 October 2010] opening the way for Potanin to bid for effective control of the company.

Shortly afterwards, UC Rusal rejected an offer by Potanin to discuss the possible sale - though it was doubtful this would be the final shot, fired in the “feud” between the two oligarchs [MJ 29 October 2010].

Norilsk then commenced a "share buy back", priced at US$3.5 billion, which saw Russian state bank, VTB, sell its holding in the company (Reuters noted that VTB's deputy chief executive, Vasily Titov, is also the chairman of Norilsk Nickel's board [Reuters 9 February 2011]).

Deripaska's Rusal, although reportedly $11.7 billion in debt, also turned down a $13 billion offer from Norilsk for its own 25% stake, preferring a dividend payout [Reuters 9 February 2011, ibid].

In May 2011, an economic court of appeal in the Ukraine ruled that UC Rusal's Zaponizhzhya aluminium smelter (owned as to 68%) be returned to state ownerhip - a decision the company said it would challenge.

Meanwhile,Rusal said, it would reduce production from two of its smelters in the country's Khaska region, after a railway bridge, used to transport raw maerials, had collapsed on 7 May 2011 [MJ 20 May 2011].

During 2011, the battle for control of Norilsk showed no sign of waning.

In August 2011, Rusal once again turned down a buyback offer from Potanin - this time for 15% of Rusal's stake in the company. Deripaska said that buybacks were "in the interests of the Interros group and do not meet the interests of all shareholders of the company" [MJ 26 August 2011].

Then, in October 2011, Rusal said a letter from Russia’s antitrust watchdog confirmed that the planned share buyback by Norilsk Nickel could not proceed without consent from the state. Rusal claimed that a letter from the Russian Federal Anti-Monopoly Service “confirms that the buyback is only possible upon permission from the government commission...any buybacks conducted by Norilsk Nickel are void.”

Norilsk retorted that the letter was merely “routine” correspondence and did not raise any specific requirements for a buyback. It stated that Norilsk and Interros do not constitute a “single group” - and that the concept has not even been defined in Russia’s anti-trust laws.

According to the Russian business daily, Vedomosti: "Vladimir Potanin’s Interros aims to raise its stake above 30 percent without triggering a mandatory offer to shareholders under Russian regulations by buying back and cancelling the shares. He is seeking to increase influence over Norilsk at the expense of rival billionaire shareholder Oleg Deripaska’s Rusal..." [Vedomosti, via Bloomberg, 12 October 2011].

Just over a year later, in December 2012, the spat between Potanin and Deripaska appeared to have been resolved (insofar as any contest between Russian oligarchs can ever be assumed to reach a final resolution).

Potanin replaced Norilsk's CEO, Vladimir Strzhalkovsy, with full board approval, as the latter stepped down, with a US$100 payout (sic) in his hands.

As part of the settlement deal, Deripaska's UC Rusal and Interros would have equal control on Norilsk's board, while a third oligarch, Roman Abramovich would secure 20% voting power in the conglomerate [MJ 21-28 December 2012].

By May 2014, Norislk's market valuation had risen from US$23 only six months previously to US$30 billion - making it one of the world's dozen richest mining groups. Potanin held on to his post as the company's CEO and to his 29.9% share in it [MJ 23 May 2014].