* Chairman says RUSAL faces crisis
* RUSAL says Vekselberg failed in his role
* Deripaska says could buy Vekselberg's stake if for sale
* No discussions over selling Norilsk stake since autumn
By Megan Davies and Polina Devitt
MOSCOW, March 13 Russian billionaire
Viktor Vekselberg quit on Tuesday as chairman of UC RUSAL
, the world's largest aluminium producer, saying the
heavily indebted company was in deep crisis after a long battle
with rival oligarch Oleg Deripaska.
Vekselberg's exit widens a rift with controlling shareholder
Deripaska, who had sought to build a Russian metals and mining
business on a global scale by merging RUSAL with Norilsk Nickel
, the world's top nickel and palladium miner.
Energy and metals magnate Vekselberg could now mount a legal
challenge to Deripaska's determination to keep a stake in
Norilsk, which, if sold, would almost wipe out the company's $11
billion debt burden and enable it to look at other merger
"I regret to say at this time that Rusal is in a deep crisis
caused by the actions of the management," said Vekselberg,
listed by Forbes magazine as Russia's eighth-richest man with a
fortune of $12.4 billion.
Deripaska said Vekselberg had failed to fulfill his
chairman's role by not attending meetings for a year and was
jumping before he was pushed.
"The decision of Mr. Vekselberg to resign as chairman of the
board pre-empted the anticipated consideration of this matter by
the board," a statement from RUSAL said.
RUSAL's board will pick a new chairman from its slate of
independent directors at a board meeting on Friday, Deripaska
later told reporters.
RUSAL's shares were suspended after falling 1.3 percent in
Hong Kong on Tuesday. The company said it expected trading
in Hong Kong and Paris to resume on March 14.
Deripaska, a theoretical physicist who emerged triumphant
from Russia's aluminium wars of the 1990s, bought a one-quarter
stake in Norilsk through RUSAL four years ago, but the debt that
financed the deal became a major headache when the global crisis
RUSAL was forced into a debt restructuring, killing
Deripaska's dream of a mega-merger, but he blocked calls by
partners Vekselberg and billionaire politician Mikhail Prokhorov
to sell the stake back to Norilsk.
"RUSAL is a good company, but the (economic) cycle is not
that simple," Deripaska told reporters on a conference call late
"The events that will influence the price of aluminium lie
ahead. I would hardly advise anyone to sell. It is necessary to
wait until the Asian and European markets rebalance."
"This escalates the conflict," said Robert Mantse, metals
and mining analyst at Otkritie, a Moscow-based brokerage.
"Although most of the disagreements ... are well known, the
resignation of Vekselberg shows just how far he and Deripaska
now stand apart in the running of the company."
The shareholder dispute is complicated by the outsized egos
of Russia's resource oligarchs, with the principal players,
including Norilsk's main shareholder Vladimir Potanin, having a
long history of troubled relations.
Russia's mining sector is highly politicised, with oligarchs
effectively owning their assets at the pleasure of the Kremlin.
Vekselberg's resignation follows Prime Minister Vladimir Putin's
victory in a presidential election. Prokhorov, running in his
first election on a liberal ticket, took third place, though
some viewed his candidacy as creating a convenient illusion of
democracy that worked to benefit Putin.
Prokhorov's investment company, Onexim, declined comment, as
did Norilsk Nickel. Vekselberg was not available for further
Deripaska, having failed to secure influence in steering
Norilsk, has spurned three offers by Potanin to buy back the
stake at a steep premium to its current value.
After paying an estimated $14 billion in cash and stock for
the holding in 2008, he turned down a $13 billion buyout offer
from Norilsk in December 2010 and rejected two lower offers in
spring and autumn of last year.
"If (Deripaska) looked silly for buying it at the top of the
market, he could have looked smart now if he'd (sold) Norilsk in
the spring of 2011," said Steven Dashevsky, founder and chief
investment officer at Dashevsky & Partners.
"But that required a focus on the value creation of the
business," he told Reuters.
No discussions about selling that stake have been held at
RUSAL since last autumn, Deripaska said.
"I look at Norilsk Nickel optimistically," he said. "We have
not discussed this for a long time with anyone."
RUSAL, which floated in Hong Kong in early 2010, has a
market capitalisation of about $12 billion. Its 25 percent stake
in Norilsk makes up the bulk of its equity market value, priced
at about $9.4 billion.
Analysts and insiders said they see no short-term way out of
the deadlock and that no plans are afoot to sell the stake.
One source close to Vekselberg's camp said it had "only one
way out -- to sue Deripaska".
While Vekselberg's resignation tightens Deripaska's grip as
chief executive of RUSAL, the company faces a struggle to pay
off its debt.
Aluminium prices fell sharply last year as China's economic
growth slowed, though they have recovered this year after global
rivals such as Alcoa cut production. RUSAL's stock, at HK$6.12,
is now 43 percent below its IPO price.
Vekselberg is widely viewed as a financial investor who
wants quick returns on his investments, while Deripaska has a
bullish long-term view on world metals demand and has invested
heavily to boost RUSAL's output.
RUSAL said the board would meet on Friday to appoint a new
chairman. It is expected to elevate one of its five independent
directors, who include Anatoly Tikhonov, first deputy chairman
at Russian state development bank VEB.
The move raised speculation that Vekselberg might sell his
15.8 percent stake in RUSAL, which he owns with partners, though
the sources close to his camp said that was out of the question.
Deripaska said he enjoyed a pre-emptive right to buy the
stake under a shareholder agreement.
"If they sell, we will discuss it," Deripaska said, adding
that he spoke with Vekselberg on Tuesday, and that the two had
"different views and divergent positions".
Prokhorov has also dismissed suggestions that he might sell
his 17 percent stake in RUSAL, which he acquired in a
cash-and-stock deal when he sold his one-quarter holding in
He told Reuters in a recent interview that RUSAL and Norilsk
should either agree to merge or make a clean break.
"As a former chief executive at Norilsk Nickel, I have a
personal opinion that it is better to sit at a table and to make
an agreement - who is leaving - or to make a merger of Norilsk
Nickel and RUSAL," Prokhorov said.
Deripaska, through his investment vehicle EN+, owns 47.4
percent of RUSAL and has overall strategic control. According to
Forbes magazine's latest rich list, Deripaska's wealth nearly
halved over the past year to $8.8 billion.