Norilsk Pension Fund Seeks RUSAL Buyout

LONDON (Reuters) - Russia's Norilsk Nickel (GMKN.MM), the world's largest nickel producer, plans to buy out a stake in the firm from aluminum giant UC RUSAL (0486.HK) (RUAL.PA), with the help of Norilsk's pension fund.

"The pension fund has launched an initiative to create a pool of investors to buy out RUSAL's Norilsk stake," Vladimir Strzhalkovsky, Norilsk's chief executive officer told the Reuters Russian Investment Summit on Tuesday.

The pension fund itself has around 1 percent of Norilsk shares, Strzhalkovsky said.

Earlier on Tuesday RUSAL's CEO and major shareholder Oleg Deripaska told Reuters the aluminum powerhouse had no plans to sell its 25 percent stake in Norilsk.

Another stake of 25 percent is owned by Interros, an investment vehicle of tycoon Vladimir Potanin.

Strzhalkovsky said that the pension fund, Norilsk and Interros could take part in the pool.

"I will not name others, but we have had plenty of calls," he said, adding he saw no obstacles for a foreign company to take 5-7 percent in Norilsk. "I see RUSAL stopping being a Norilsk shareholder an optimal solution."

He said that foreigners also could take part in the buyout of Norilsk which is a strategic asset to which foreigners can have limited access, according to Russian legislation.

"Over 30 percent of our shares are in the form of American Depositary Receipts, so if they (foreigners) buy 25 percent, then a government commission have to work on it, but if the talk is about five, seven or 10 percent, this does not mean losing control."

Strzhalkovsky said he is aware that currently RUSAL has no intention of disposing of its shares.

"You can't buy something that is not for sale, but the situation may change," he said, adding that the sale of Norilsk could help lower RUSAL's massive debt.

PENSION FUND TO VOTE WITH MANAGEMENT SHARES

Strzhalkovsky also said that the management will hand to the pension fund 8.5 percent of Norilsk shares, which are held by various Norilsk units, before an extraordinary shareholder meeting scheduled for October 21.

He said the fund has created a coordination committee, which includes all Norilsk trade unions, so that the employees and all organizations which are part of the pension fund, could influence the policy of Norilsk Nickel through their representatives on board.

The EGM was called at the initiative of RUSAL, which lost a seat on the Norilsk board at a general shareholders meeting in June.

Strzhalkovsky said he was optimistic about prices of metals it produces.

"Nickel prices (in the middle term) will stay at more or less current level, maybe they will be a little bit higher, Strzhalkovsky said.

"As far as palladium is concerned, there is a growth potential, as there is very little of this metal, while car production, where it is used, is on the rise and there is more and more interest toward it from jewelers."