Potanin raises Norilsk ante with aggressive sale and purchase move

Despite an unprecedented liquidity squeeze in Russia, Vladimir Potanin has gone ahead with a sale of assets he controls to Norilsk Nickel. It is not thought the approval of UC Rusal, which holds 25 percent of Norilsk, had been sought.

Posted:  Tuesday , 14 Oct 2008

MOSCOW (Reuters) - 

Russian billionaire Vladimir Potanin has sold $600 million worth of assets to the power unit of mining giant Norilsk Nickel (GMKN.MM), the unit said on Monday in a move that may deepen a spat between Norilsk owners.

Norilsk's power unit OGK-3 (OGKC.MM) said in a statement it had bought a stake of 25 percent minus one share in RUSIA Petroleum, which has a license in a major East Siberian gas field, for $576 million.

The RUSIA Petroleum stake was either controlled or co-owned by Potanin. OGK-3 will also buy Potanin's 35 percent stake in U.S. fuel cell maker Plug Power Inc (PLUG.O) for $33 million. Potanin is a co-owner of Norilsk.

OGK-3 did not say how it or Norilsk would pay for the assets at a time when Russian companies are facing an unprecedented liquidity squeeze amid the virtual closure of world capital markets.

Norilsk is at a centre of a dispute between some of Russia's richest men including Potanin and Oleg Deripaska, a top shareholder in the world's largest aluminium producer United Company RUSAL.

On Monday, RUSAL declined immediate comments but sources close to the company said the latest deal had not been cleared with RUSAL.

RUSAL bought a stake of 25 percent in Norilsk earlier this year and has since then accused Potanin of mismanaging the firm and taking effective control of Norilsk, the world's largest nickel and palladium miner.

In September, three of Norilsk's subsidiaries bought around 8.7 percent of its shares but RUSAL said the deal was unlawful and violated its shareholding rights. Potanin, who as of May 26 owned 29.8 percent in Norilsk, denies all allegations by RUSAL. (Reporting by Guy Faulconbridge and Aleksandras Budrys, editing by Dmitry Zhdannikov, Richard Chang)

Jean-Louis Kayitenkore
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