MOSCOW - Norilsk Nickel Chairman Alexander Voloshin said on Tuesday it would make sense for the world's largest nickel miner to merge with other Russian metals companies after the financial crisis is over.
Voloshin, a former head of the Kremlin administration, told Reuters the idea of uniting Russia's largest metals firms could potentially be resurrected after commodity prices recover and the companies involved sort out their individual debt problems.
In a crisis, no. But in principle, yes, Voloshin said, when asked whether Norilsk should merge with other metals firms. He said the company had no concrete plans for any such deal.
Russia's metals billionaires shelved plans to create a national mining giant around Norilsk Nickel after the Kremlin opposed plans to absorb their billion-dollar debts in exchange for a stake in such a firm. Metals and steel company owners had earlier proposed various schemes to offload debt by creating a Russian equivalent of the world's largest miner, BHP Billiton and offering the state a minority stake. Voloshin, who worked as chief of staff for late President Boris Yeltsin and his successor Vladimir Putin, became chairman of Norilsk in December after state bank VEB took a stake as collateral on a $4.5 billion loan to shareholder UC RUSAL.
Deutsche Bank metals and mining analyst Olga Okuneva said Voloshin's statement to Reuters confirmed the state was willing to support a mega-merger, but only if the conditions are right.
The state will support a merger between Norilsk and other companies only if it is profitable for both the companies themselves and their shareholders, Okuneva said.
Norilsk Nickel doesn't need such a merger right now because it has an adequate level of debt, she said.
(Writing by Robin Paxton; editing by Simon Jessop)