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DJ UPDATE: Rusal Confident Of Restoring Norilsk Board Position
Jul 7,2010 08:51CST
industry news

 LONDON, July 7 -- Russian aluminum giant United Co. Rusal PLC (0486.HK) said Tuesday it is confident it can restore its position on the board of OAO Norilsk Nickel (GMKN.RS) following a power struggle that saw the chairman ousted.

"We believe we can restore the Rusal position on the board of Norilsk and most importantly, we have a government request to restore Alexander Voloshin as the chairman of the company... Voloshin will be elected at the next shareholder meeting," Chief Executive Oleg Deripaska said in London.

Rusal, which owns a 25% stake in Norilsk, has accused the company's management of "manipulation" in board elections in which Voloshin was ousted.

There was "no logic" to the recent actions by the management of Norilsk. "They [Interros] believed the management was loyal to them and they slightly lost control," Deripaska said.

Interros Holding has a 25% stake in Norilsk and is owned by Russian billionaire Vladimir Potanin. Rusal and Interros are fighting for control of Norilsk after a recent truce came to an end.

Deripaska added that the board now needs new blood. "I think it's a time when new independents should come to the board. The existing independents and directors have done a great job for the shareholders but it's time for a new set up. They triggered this in the process," he said.

"I tell you honestly we'll never agree on any CEO nominated by Interros... We'll fight to the death to bring an internationally recognized metals and mining expert to run the company. It may be a slightly painful process but finally a happy ending," he said.

After voting at the recent annual general meeting concluded, Rusal had just three of its representatives on the board, including Deripaska, while Interros got four.

Rusal has said it intends to contest Norilsk management's actions and convenean extraordinary general meeting of Norilsk.

Deripaska said he has never sought to be chairman of the board, nor is there an agreement that he cannot be on the board at all.

"There has never been an agreement that says I can't be on the board. Maybe for Potanin it's difficult to be on the board, but not for me, and I have a strong demand from my shareholders and investors to go on the board and to make
sure we have enough of an understanding what's going on in our key investment," he said.

"It's ridiculous to think that Rusal somehow can get an advantage over Norilsk cash--the whole of our past experience demonstrates that it was Interros who used this cash."

Rusal is seeking to have four or five representatives on the board, and is "very happy" to have three independents.

"I'm sure that with seven out of 13 members, it'll guarantee that corporate governance procedures will be in place," he said. "We demand that we bring professional people into Norilsk, and the company could deliver at this level of pricing $3.5 billion in net income, minimum, and with all our efforts on marketing and better cash management and operation optimization, it could be
even more."

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