Nornickel shareholder is not pleased with current shareholder agreement

A shareholder agreement signed eight years ago by the main owners of Russian mining giant Norilsk Nickel has become a relic of the past that the $ 44 billion miner doesn't need, its largest shareholder Vladimir Potanin told Reuters. Potanin's Interros holding, aluminum producer Rusal, and a few other stakeholders signed the dividend payout agreement here to end an earlier dispute on the matter, as well as questions about broader strategy and management. However, Potanin said the deal was now under way. "Maintaining this 'superstructure' will put even more pressure on Nornickel with the aim of maximizing dividends regardless of the economic and social situation around the company," said Potanin in his strongest public comment to date on the agreement. The agreement expires on January 1, 2023, and the question arises whether it will be extended or suspended after that date. The agreement gave shareholders additional tools to control Nornickel, including the right to veto key stakeholders in certain transactions and financial control, as well as appointing Potanin as managing partner. These are relics "that Nornickel does not need for further effective development and modernization," he said in a comment emailed to Reuters, adding that since 2012 Nornickel has improved business efficiency and corporate governance. The market value of nornickel has increased by 50% since 2012. However, this year the company was hit by lower demand for raw materials due to the COVID-19 pandemic, which caused some of its competitors to cut dividends, as well as a large fuel spill at an Arctic power plant in late May. In the aftermath of the oil spill, Potanin, which owns a 34.5% stake, proposed capping the company's final dividend at $ 1 billion for 2020, while Rusal, which is based on dividends from its 27.8% stake in Nornickel instructed, requested a management overhaul. "Today, the vision of Interros and Rusal in terms of corporate governance at Nornickel is fundamentally different," said Potanin. "Rusal advocates a further tightening of the control systems, which from Interros' point of view is in contradiction to the principles of normal corporate management, which imply, for example, sensible decentralization," he added.