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Soccer boss buys stake in mining giant

Dec 11 2012 09:45

Moscow - Billionaire Chelsea FC owner Roman Abramovich is to pay almost $1.49bn to acquire a stake in Russian mining giant Norilsk Nickel to help end a feud between its main shareholders, they said Tuesday.

Abramovich’s surprise entry into the capital of Norilsk was announced last week as a way of making peace between its main shareholders - the world’s largest aluminium producer Rusal and investment firm Interros.

Oleg Deripaska who controls Hong Kong-listed Rusal and fellow oligarch Vladimir Potanin of Interros have for years squabbled over the company's strategy, sparking concern in the Kremlin about the future of a key Russian firm.

Analysts saw the entry by Abramovich – who commenters believe retains cordial ties with President Vladimir Putin – as a move encouraged by the Kremlin to create a neutral third party shareholder in the company.

Rusal and Interros said in a joint statement Tuesday that they will sell 3.87 million and 5.42 million shares respectively to Abramovich’s investment vehicle Millhouse at $160 a share.

The statement said that this will give Interros 30.3%, Rusal 27.8% and Millhouse 5.87% stakes in the company. The volumes mean that Abramovich will pay $1.487bn for the stake.

Abramovich’s final stake is a little lower than stated in the original deal announcement when it was set at 7.3%.

“All parties’ efforts will be integrated to deliver improved corporate governance and to increase the value of Norilsk Nickel in the interest of its all shareholders,” the statement said.

The deal will also see Potanin become chief executive of Norilsk Nickel, the world's largest producer of nickel and palladium, replacing Vladimir Strzhalkovsky who had been named in 2008.

His appointment will be confirmed at a board of directors meeting on December 17, the statement said.

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