Rusal acquisition in jeopardy as Norlisk co-owners mend fences

A report in The Sunday Telegraph suggests that the proposed merger of the Russian miners, Rusal and Norilsk Nickel, may be in jeopardy.

Norlisk can be said to owe its position as the world’ largest nickel producer to Mikhail Prokhorov and Vladimir Potanin, who between them own over 50% of the business.

Owing to a disagreement between the two men, Mr Prokhorov proposed to sell his stake in the company to Rusal, the aluminium group.

However, it is reported that Mr Prokhorov and Mr Potanin have settled their differences.

On Tuesday of last week, when Norilsk held an extraordinary general meeting inviting shareholders to vote on whether to appoint new directors connected to Rusal onto the board, Norilsk’s management asked shareholders to vote for two independent directors.

This has been taken as a strong indicator that the two owners will continue to work together, with the possibility that Mr Prokhorov could withdrawn from the sale of his shares to Rusal.

Rusal has secured up to £2.25 billion of loans from a number of investment banks to finance the acquisition and will no doubt be liable for fees associated with the proposed purchase.

It is understood that there is a $300 break fee involved on Mr Prokhorov side of the deal.