* Abramovich to pay RUSAL, Potanin $1.5 bln in revised deal
* Abramovich was expected to buy shares from Norilsk for $2
* The deal leaves less cash for Norilsk future dividend
* Norilsk to cancel almost 17 pct of treasury shares
By Polina Devitt
MOSCOW, Dec 11 Roman Abramovich, the Kremlin's
enforcer on a peace deal at Norilsk Nickel, will pay cash
straight to the Arctic giant's two main oligarch owners for a
stake in the company, depriving other investors of the windfall
from an end to a billionaires' feud.
Norilsk Nickel, which mines the vast mineral deposits of
Russia's far north, was one of the biggest prizes handed to
insiders in the post-Soviet carve-up of Russian industry that
created a clique of politically powerful tycoons.
For years the world's largest nickel and palladium producer
has suffered from a feud between its two main owners,
billionaires Vladimir Potanin and Oleg Deripaska.
Fellow billionaire Abramovich, owner of London's Chelsea
football club, settled the row last week by sweeping in to buy a
stake under a deal that appeared to have the blessing of
President Vladimir Putin.
A revision, announced on Tuesday by Norilsk and Deripaska's
Hong Kong-listed aluminium producer RUSAL, would see
Abramovich buy a slightly smaller stake, but pay for it directly
to the two billionaires' firms, rather than Norilsk.
Analysts said that means the cash windfall injected by
Abramovich's Millhouse holding company would bypass Norilsk's
minority investors, and probably force Norilsk to borrow to
fulfil promises to increase its dividends.
"This means that Norilsk Nickel (as well as its minorities)
will not receive any cash from Millhouse Capital's arrival as
minority shareholder," J.P. Morgan Cazenove said in research.
Under the original deal, Abramovich was to buy a 7.3 percent
stake in Norilsk from the company itself for $2 billion, and
also be given voting power over some of Deripaska's and
Potanin's shares, representing a total of 22 percent. The
revision would see Abramovich buy a 5.86 percent stake for $1.5
billion and be given voting control over about 20 percent.
Alexander Abramov, Abramovich's partner in Evraz,
Russia's largest steelmaker, could become the new board chairman
at Norilsk Nickel, a source close to on e of shareholders s a id.
Norilsk's minority shareholders have spent the last four
years caught in the quarrel between Potanin and Deripaska, who
resisted pressure from his own shareholders to sell RUSAL's
stake in Norilsk to pay off debt, and instead campaigned for
management changes and dividends from the Arctic giant.
The revision, likely to have been blessed by the Kremlin,
appears to be a win for Deripaska, whose aluminium company, with
$10.7 billion in debt, is struggling with weak aluminium markets
and has called for production cuts to boost prices.
"The difference is Deripaska gets cash up front, which he
needs for RUSAL," a Moscow based equity trader said, asking not
to be identified while discussing the deal.
With the Moscow market up 0.19 percent, Norilsk shares
fell 2.36 percent to 5,210 roubles per share by 1152 GMT, while
shares in RUSAL ended down 0.6 percent in Hong Kong trade.
According to the source, Norilsk Nickel will stick to a
pledge to pay dividends, another key demand by Deripaska, in the
amount of $3 billion per year for 2012-2014. Th is wou ld r o ughly
equal Nor ilsk Nickel's expected earnings, VTB Capital analyst
Nikolai Sosnovsky said.
"The deal is disappointing to those minorities who expected
funds from the deal to come to the company and to return via
dividends," Sosnovskiy said, adding the company would likely
need to borrow to fund dividends instead.
"Payment of almost 100 percent of net income would be
difficult, because of capex," Sosnovskiy said.
Under the revised terms, RUSAL said Abramovich would acquire
9.29 million shares from Potanin and RUSAL at $160 per share,
implying an 11 percent discount to Norilsk's market price of
5,380 roubles ($180) at Monday's close.
Abramovich will hold 5.87 percent of Norilsk Nickel, RUSAL
would hold 27.8 percent and Potanin's Interros would hold 30.3
percent, after Norilsk's treasury shares - amounting to almost
17 percent of its issued capital - are cancelled.
To ensure Abramovich's role as enforcer of the peace, the
other two billionaires will give him voting power over some of
their shares, so that his voting stake amounts to about 20
percent. That would leave the three billionaires with nearly
equal voting stakes, meaning Abramovich can impose a resolution
in any dispute between the other two.
Abramovich, the 68th-richest man in the world with a fortune
estimated at $12.1 billion by Forbes magazine, is widely viewed
as having among the strongest Kremlin ties of the oligarchs. He
himself once co-owned some of RUSAL's assets with Deripaska.
Potanin and Deripaska have been locked in a shareholder
dispute since the RUSAL bought a one-quarter stake in Norilsk
just before the 2008 global crash in a deal around $14 billion.
Deripaska had accused Potanin of running the company on
behalf of his own interests and refusing to pay out profits in
dividends to other shareholders. Lawsuits between them were
cancelled as part of last week's deal.