Dec. 22 -- Trafigura Beheer BV, the second- largest industrial metals trader, said its plan to buy an 8 percent stake in Russia’s OAO GMK Norilsk Nickel will give it a “fast-track expansion” in accessing output of the metal.
Trafigura, based in Amsterdam, is completing the purchase of the stake in Norilsk, the world’s biggest nickel producer, the trading company said on its website today.
"The intention is to create a partnership with Norilsk that provides a fast-track expansion plan into the nickel market by having better direct access to the production,” Simon Collins, the trading company’s refined metals chief, said in the statement. “Trafigura believes there are considerable synergies between the companies.” Norilsk, whose largest shareholders are locked in a dispute over control, will sell $3.5 billion of American depositary receipts to raise funds for “general purposes,” the Moscow- based company said in a statement yesterday. Trafigura doesn’t plan to raise its holding to more than 10 percent, Norilsk said.
Under the deal, Trafigura may plan for Norilsk “to direct a certain portion of nickel sales via the trading house,” said Dmitriy Kolomytsyn, an analyst at Morgan Stanley in Moscow. Guido de Jongh, a Trafigura spokesman in Amsterdam, and Norilsk spokeswoman Maria Uvarova in Moscow declined to comment.
Norilsk’s billionaire shareholders Oleg Deripaska and Vladimir Potanin have bickered over influence on the board and use of cash in a feud dating back to 2008. Norilsk last week offered $12 billion to buy back the 25 percent stake held by Deripaska’s United Co. Rusal, and yesterday’s accord would provide cash for such a deal, according to Nomura Holdings Plc.
Buying Out Rusal
"The sale of treasury stock may indicate that Norilsk is going ahead with its plan to buy out” Rusal, said Vladimir Zhukov, an analyst at Nomura in Moscow.
Norilsk said in August it declined an offer from Glencore International AG, the world’s largest commodities trader, to take over the mining company’s nickel sales. Glencore owns 8.75 percent of United Co. Rusal and sells part of its aluminum.
Rusal voiced concern at the Trafigura deal.
"We are concerned that an asset worth over $3.5 billion was monetized without discussion and voting at the board,” Rusal said yesterday in a statement. “Moreover, the stake was sold to Trafigura, a company which is a direct competitor of Norilsk Nickel for marketing and sales of its metals.”
Trafigura had revenue of $47.3 billion last year, compared with $106.4 billion at Barr, Switzerland-based Glencore, according to the companies’ websites.
The sale to Trafigura may presage an “ultimate acquisition of Rusal’s stake in Norilsk,” where Trafigura provides funding for Norilsk’s bid, said Erik Danemar, an analyst at Deutsche Bank AG in Moscow. Norilsk’s Uvarova and a spokesman for Trafigura both declined to comment.