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UPDATE 1-Russia's Potanin open to RUSAL's Norilsk stake-source

Published 06/23/2009, 12:40 PM
Updated 06/23/2009, 12:48 PM
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* Potanin interested if RUSAL offers Norilsk stake-source

* RUSAL says not considering sale

* Analysts believe the chances of a deal are low

(Changes source, adds details, analysts)

By Polina Devitt

MOSCOW, June 23 (Reuters) - Russian billionaire Vladimir Potanin would be interested in buying UC RUSAL's stake in Norilsk Nickel if it was for sale, a source close to Potanin said, a deal that would give him control of the metals giant.

Potanin currently holds a 25 percent stake in Norilsk, the world's top producer of nickel and the platinum group metal palladium, while tycoon Oleg Deripaska's RUSAL holds 25 percent plus two shares.

"We are satisfied with our partnership with Deripaska and we are happy with the current share distribution in Norilsk," a source in Potanin's investment vehicle Interros told Reuters on Tuesday. "But if RUSAL's stake is offered, we will be interested."

RUSAL spokeswoman Vera Kurochkina said the Norilsk stake was a strategic investment for the firm and was not considering selling it.

The source said that the stake may be available for sale in the autumn, but did not elaborate.

RUSAL's stake is now being held as collateral against a $4.5 billion loan from state bank VEB. This month, VEB extended the maturity date on RUSAL's loan by one year.

Aluminum producer RUSAL, which has a debt of $16.8 billion, bought the Norilsk stake from Potanin's former business partner Mikhail Prokhorov for about $7 billion and a 14 percent stake in RUSAL.

Currently, Norilsk has a market capitalisation of around $17 billion. The RUSAL stake, at current market prices, would cost about $4 billion.

ANALYSTS DOUBTFUL

Analysts said they doubted RUSAL would agree to sell the stake.

"RUSAL, as we believe, is not ready to sell the stake at this price," UralSib investment bank said in a market review.

"The possibility of such a deal is very low," UniCredit Aton analysts said. "Most of RUSAL's debt may be restructured shortly. However, Potanin's initiative indicates that the relations between the partners may be worsening again."

Vedomosti business daily on Tuesday quoted a source close to Potanin's Interros investment vehicle as saying Potanin may seek a partner to buy Deripaska's Norilsk stake, possibly with the owners of either potash miner Uralkali or coal miner SUEK.

The newspaper said Potanin had already held consultations with the government but had not yet approached RUSAL, which had said it did not intend to sell the stake.

Igor Sechin, an influential deputy prime minister, told Reuters he had not been approached by Potanin.

When asked about his position on a possible sale of the stake, he said: "It will depend on the concrete situation."

Both Potanin and Deripaska were forced to put up their stakes in Norilsk as collateral with Russian state banks that helped them repay large foreign debts last year.

Potanin has also been reported to have pledged as collateral a big chunk of his holding in Norilsk with state-controlled VTB in exchange for a $3 billion loan. (Writing by Gleb Bryanski and Aleksandras Budrys; editing by Karen Foster)

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