VTB Sold its Norilsk Stake in Buyback-Agencies

MOSCOW, Feb. 10 -- Russian state bank VTB (VTBR.MM) sold all its shares in Norilsk Nickel (GMKN.MM) in the miner's $3.5 billion buyback, Russian news agencies quoted the bank's Deputy Chief Executive Vasily Titov as saying on Wednesday.

Titov is also the chairman of Norilsk Nickel's board. The bank held around 1 percent of the world's largest palladium miner in October at the time of its last shareholder meeting.

The buyback netted around 7 percent of Norilsk shares.

Norilsk's main owner, businessman Vladimir Potanin's Interros group, last year refinanced a VTB loan secured by 13 percent of Norilsk Nickel with a $2 billion loan from top state bank Sberbank (SBER03.MM).

The buyback garnered more interest than expected. Some investors had said the buyback price was not attractive enough, especially in light of rallying copper prices.

Norilsk said on Wednesday the buyback remained suspended on the order of a Caribbean court.

The buyback has been a point of conflict with aluminium giant RUSAL 0486.PA, which, like Interros, owns 25 percent of Norilsk Nickel.

RUSAL has $11.7 billion in debt but turned down a $13 billion offer from Norilsk for its stake, preferring a dividend payout.

Norilsk Nickel says it suspended the buyback after a court in St. Christopher and Nevis granted an injunction on a challenge from RUSAL.

RUSAL issued a statement on Tuesday saying only that Norilsk subsidiaries Raleigh and Corbiere, which were the vehicles for the buyback, were barred by the court from voting or transferring the shares. If the shares are not voted, RUSAL's influence at an upcoming board meeting would increase. [ID:nLDE7171W9]

"RUSAL's statement, while it would be welcome if true, is in fact misleading and inaccurate," Norilsk said on Wednesday.

"Given the breadth of the order obtained by RUSAL, Corbiere must continue to comply with its terms, unless and until the order is cancelled or modified to permit Corbiere to complete the buyback as planned," the statement added.

The aluminium giant says it belives the buyback is complete and the shares are now held by the two subsidiaries.