Russian watchdog questions Norilsk share buyback
“The FAS letter confirms that the buyback is only possible
with the permission of the government commission (on foreign
investments, headed by Prime Minister Vladimir Putin),” Norilsk
shareholder UC RUSAL said in an e-mailed statement.”Without the permission, all Norilsk deals within the
buyback are null and void.”Norilsk’s board approved on Sept. 13 a buyback of 7.7
percent of its shares at $306 each, a total of $4.5 billion.The offer came after the board of the world’s biggest
aluminium producer, RUSAL, rejected an offer for its Norilsk
shares, also at $306 each.Norilsk has been pushing for a buyback to resolve a
long-standing dispute between rival oligarchs Vladimir Potanin,
whose Interros investment company holds about 30 percent of
Norilsk, and Oleg Deripaska, who controls RUSAL.Alfa Bank analysts said the letter referred to an article of
the law on competition.This states a group of investors controlling more than 10
percent of shares, or a foreign investor buying shares in a
strategic company, must first receive approval from the
commission.”The most likely outcome is that the commission will grant
approval, but the process may delay the buyback,” Alfa Bank
said in a note.Norilsk appeared little moved by the letter, and said it was
preparing a response to the government body.”The letter does not contain any demands and is just part of
an exchange of letters between the company and the FAS started
in August 2011, following appeals by RUSAL and Norilsk,” it said
in a statement.”Currently, the (buyback) programme is proceeding at full
speed in accordance with the announced conditions.”RUSAL and Norilsk declined to provide a copy of the letter.
