Russia's United Company RUSAL, the world's largest aluminium producer, has a debt of about $13 billion, its new billionaire shareholder Mikhail Prokhorov said in an interview published on Wednesday.
Kommersant business daily quoted Prokhorov, who owns 14 percent of UC RUSAL, as saying he backed a merger with Norilsk Nickel and aimed to convince shareholders of such a plan by joining the board at the world's top nickel miner.
I consider the merger of these two companies to be valuable and interesting for shareholders on both sides and that it would have a significant knock-on effect, Prokhorov told Kommersant.
The market capitalisation of such a powerful company would be more than $100 billion. Therefore I'm preparing to join the board at Norilsk, as agreed with UC RUSAL, and to work in the interests of all shareholders to bring about a merger.
Prokhorov, ranked Russia's fifth-richest man by Forbes, acquired his UC RUSAL stake in part-payment for the one-quarter stake in Norilsk he sold to the aluminium company in April.
The deal was part of a high-profile split between Prokhorov and ex-business partner Vladimir Potanin, the single largest shareholder in Norilsk with a nearly 30 percent stake.
I very much hope Vladimir Potanin will also join the board of directors to make the consolidation process more legitimate, transparent and understandable for the market, Prokhorov said.
Norilsk will elect a new board on June 30. UC RUSAL has proposed retaining a nine-man board but changing the structure to comprise three of its nominees, three from Potanin's Interros group and three independent directors.
Norilsk's management wants to increase the number of board directors to 13.
A UC RUSAL spokeswoman said the company's total debt was about $14 billion, sourcing this to an interview given by Capital Markets Director Oleg Mukhamedshin to Prime-Tass in May.
Asked what he had discovered about UC RUSAL since becoming a shareholder, Prokhorov said: Before, I was more pessimistic about RUSAL's growth prospects. Now I'm more optimistic.
He told Kommersant a three-way merger with Metalloinvest, the iron and steel firm founded by Alisher Usmanov, was also a possibility, although he did not yet know enough about the ferrous metals business to make a considered judgement.
Usmanov and Potanin last month agreed an asset swap that could either lead to a three-way merger or scupper UC RUSAL's plans for a full merger with Norilsk.
In a full-page interview, Prokhorov also told Kommersant his plans for gold miner Polyus Gold -- particularly his plans to spin off the company's exploration business -- clashed with those of Potanin.
It's a civilised battle for minorities' votes, he said. Prokhorov has also tabled a bid for the strategic Udokan copper field in Siberia, which the government plans to auction off in September. The billionaire proposed uniting Udokan, Russia's largest copper field, with other copper projects near the Chinese border run by Norilsk Nickel and others as this would better serve Russia's interests in supplying copper to the Chinese market.
Mining Udokan as one deposit makes neither political nor economic sense, Prokhorov said in the interview. What is required is a two-pronged geopolitical strategy: the first, a government decision to create a powerful business on the border offering protection against potential Chinese expansion into this territory, he said.
The second is government assistance in purchasing processing plants in China to which the copper can be sent. To see a recent Reuters story on the Udokan deposit, please double-click on (Writing by Robin Paxton; editing by Rory Channing)
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