* Deripaska reported to be willing to pay $9 bln
* Minorities likely to be sceptical
* Unclear how Deripaska could finance deal
By Polina Devitt and Douglas Busvine
MOSCOW, March 26 Russian tycoon Oleg Deripaska
is ready to buy RUSAL's 25 percent blocking stake in
Norilsk Nickel to resolve a shareholder dispute at the
world's largest aluminium producer, a source close to the RUSAL
board said on Monday.
Deripaska's gambit seeks a way out of a row with minority
shareholder Viktor Vekselberg, who quit as RUSAL's chairman two
weeks ago, saying the firm was in "deep crisis" and overburdened
A buyout of the stake by Deripaska, RUSAL's chief executive
and largest shareholder, at a price reported to be around $9
billion, is likely to be resisted by minorities and may not be
possible to finance, bankers and analysts say.
RUSAL bought the holding in Norilsk Nickel, the world's
largest miner of nickel and palladium, for an estimated $14
billion at the top of the market in 2008, and the company is
still carrying an $11 billion debt burden as a result.
"No official proposal has been made, but it would be the
only right and beautiful way to resolve the problem," the source
told Reuters on condition of anonymity.
"As a result, RUSAL's debts would fall, the company would be
able to pay out dividends to shareholders, raise its share price
and concentrate on its aluminium projects."
The Vedomosti business newspaper said on Monday that
Deripaska was prepared to offer around $9 billion for the stake,
representing a premium of around 3 percent to Norilsk's closing
share price on Friday.
Vedomosti, citing four sources, said Deripaska's holding
company En+ might pay $4.4 billion in cash and assume a $4.6
loan to RUSAL from state-controlled Sberbank secured
against the Norilsk stake.
By paying down its debt burden, RUSAL would be freed from
debt covenants, enabling it to pay out $4.4 billion in dividends
to its shareholders as part of the deal.
The source said there had been no mention yet of price in
talks between RUSAL's shareholders. It was not clear whether
Deripaska would be able to finance a deal, but one senior banker
based in Moscow was highly sceptical.
"I don't believe it for a second," the banker said.
Sberbank declined to comment.
RUSAL's share price fell 1.9 percent in Hong Kong to HK$5.7,
bringing losses since their peak last April to around 60
percent, on fears that selling the Norilsk stake at a loss would
result in another major writedown.
RUSAL wrote down the stake by $1.4 billion earlier this
month as a result of share buybacks by Norilsk that contributed
to a 92 percent fall in its 2011 earnings.
Norilsk's shares were up 0.7 percent at 5,399 roubles in
Moscow by 1140 GMT on Monday.
Deripaska vetoed three proposals from Norilsk to buy back
the stake held by RUSAL for as much as $13 billion over the past
year or so, and minorities are not likely to accept a much lower
price, analysts said.
But, they added, it was possible that negotiations between
shareholders might progress if Deripaska were prepared to raise
"RUSAL minority shareholders are unlikely to accept the
transaction at a price that offers no premium to the market and
no premium for control," Alfa Bank's metals and mining analyst
Barry Ehrlich commented in a note.
"However, we view the news as positive, given that the
transaction price could potentially be improved."
Brokerage Troika Dialog noted that representatives from
RUSAL and En+ would not be able to take part in any board
decision to sell the Norilsk stake to Deripaska, meaning a deal
would require unanimous support from minority investors.
"On balance the sale of the stake under the proposed terms
would be transformational for RUSAL and it appears to be the
only solution to the current stalemate, so we hope it comes to
pass," commented Mikhail Stiskin, analyst at Troika Dialog.
En+, through which Deripaska owns 47.4 percent in RUSAL,
declined official comment. A representative for Vekselberg, who
with partner Len Blavatnik owns 15.8 percent of RUSAL, could not
be reached for comment.
Onexim, the investment company of billionaire Mikhail
Prokhorov that owns 17 percent of RUSAL, declined to comment.