Juan notes

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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.