United Company RUSAL urged shareholders in Russian miner Norilsk Nickel to elect two independent directors in a high-stakes June 30 vote for control of the board at the world's largest nickel miner.
Several Russian billionaires are vying for position on a new board at Norilsk to have a greater say in the future of the $52 billion company at the heart of rival proposals to create a Kremlin-approved mining colossus.
UC RUSAL Chief Executive Alexander Bulygin said on Friday his company, a one-quarter shareholder in Norilsk since April, planned to pursue a full merger. He said Norilsk shareholders should pool their votes for two independent directors to minimise the chance billionaire Vladimir Potanin ends up with control of the board.
Potanin is the largest single shareholder in Norilsk, with a stake of almost 30 percent. His Interros company has agreed to swap assets with another metals billionaire, Alisher Usmanov, as a possible alternative to a merger with UC RUSAL.
A balanced board composition should include four representatives of Interros, three representatives of RUSAL and two independent directors, Bulygin told reporters on Friday.
The statement altered UC RUSAL's previous assertion that Norilsk's nine-man board should be split equally three ways between its own representatives, those of Interros and independents.
Explaining this, Bulygin said he feared minorities might disperse their votes, resulting in only one independent being elected and Interros gaining an extra seat on the board.
He said he believed minority shareholders owned less than 40 percent of Norilsk, but did not know the exact distribution.
Thirteen candidates are standing for election: five independents, four from Interros, three from UC RUSAL plus Mikhail Prokhorov, the billionaire who sold his Norilsk stake to UC RUSAL after a high-profile split with ex-partner Potanin.
Prokhorov, who received a 14 percent UC RUSAL stake in part-payment, is expected to back the aluminium company.
Bulygin said UC RUSAL supported a proposal by Norilsk's management to raise the number of board members to 13, which would allow the election of at least three independents.
Unfortunately, the shareholder structure only permits the election of two independent directors, he said.
Bulygin said UC RUSAL also supported the election of an independent board chairman, but that an extraordinary general meeting would be needed to achieve this.
Of the five independent nominees, UC RUSAL is supporting the nominations of Tye Burt, chief executive of Canadian miner Kinross Gold, and Guy de Selliers, a Norilsk board member since 2002.
Norilsk, on the other hand, has recommended its shareholders vote in favour of de Selliers and another incumbent independent, Heinz Schimmelbush.
Bulygin added UC RUSAL was not satisfied with the current board's performance in 2007, citing a surprise 12 percent drop in net profit following the write-off of nearly $2 billion related to newly acquired power and mining assets.
But Bulygin said he saw no need to replace Norilsk Chief Executive Denis Morozov.
The board should be re-elected and Morozov should be kept and given an opportunity to work, Bulygin said. (Editing by Paul Bolding)
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