Russia's Norilsk In Talks To Sell OGK-3 To InterRAO -Sources

MOSCOW, Oct 14, 2010 (Dow Jones Commodities News via Comtex) -- Russian mining giant OAO Norilsk Nickel (GMKN.RS) is discussing the sale of its controlling stake in power generator OAO OGK-3 (OGKC.RS) with state-controlled electricity company InterRAO (IRAO.RS), according to people familiar with the matter.

The people said the discussions are at an early stage and it isn't clear whether they will lead to a deal.

Norilsk owns directly and indirectly an 82.7% stake in the power generator, worth about $2.3 billion at the current market price, though a deal would likely include a premium for control.

Buying the OGK-3 stake would be a big boost for InterRAO, which has been assembling a range of power assets inside Russia that the government has privatized over the last few years. "OGK-3 is one of the laggards in wholesale thermal power generation", TKB Capital said, adding that the change of ownership may improve the company's financial position.

Spokespeople for Norilsk and InterRAO declined to comment.

Vladimir Potanin, whose Interros owns a 25% stake in Norilsk, said Wednesday a sale is "possible," though he didn't identify potential buyers. He put the value at $2.5 billion to $3 billion, though he didn't indicate whether that was for the whole of OGK-3 or just Norilsk's stake.

A sale of the OGK-3 stake could also help ease shareholder tensions at Norilsk, where Potanin has been battling aluminum giant United Co. Rusal PLC (0486.RS), the owner of another 25% stake in the miner. Rusal has repeatedly called for the sale of the OGK-3 stake.