RusAl Secures $4.5Bln for 25% Norilsk Stake

United Company RusAl has secured a $4.5 billion loan from a group of Western banks to fund the acquisition of a blocking stake in Norilsk Nickel, the world's largest nickel and palladium miner, and expects to close the deal by the end of March.

RusAl, which is acquiring 25 percent plus one share from Mikhail Prokhorov's Onexim Group, confirmed Tuesday that it was close to completing the deal, with a view to a possible merger with Norilsk.

The Federal Anti-Monopoly Service cleared the acquisition in February, but analysts said RusAl was seen to be facing difficulties in securing financing for the stake.

Despite the tough lending environment, Credit Suisse, one of the lead arrangers in the syndicated loan, said there was "high interest" in the two-year credit.

"RusAl managed to get very attractive financing terms, given that the global market turmoil is driving interest rates higher and higher," Alexander Pukhayev, a metals analyst at Deutsche Bank, said in an investors' note.

Yelena Shuliveistrova, a spokeswoman for RusAl, would not disclose the details of the cash component of the deal, but Kommersant earlier reported that Prokhorov had offered the stake to RusAl for $12.7 billion in cash and equity. Under the terms of the deal, Prokhorov will receive an 11 percent stake in RusAl and a seat on the board.

RusAl has agreed to offer to buy out Prokhorov's minority stake if it does not hold an IPO before the end of 2009, Vedomosti reported.

The loan puts further pressure on Vladimir Potanin, the other major shareholder in Norilsk. He failed to raise $15.7 billion at the end of last year to buy out former partner Prokhorov's stake and is understood to be drumming up support to fend off a future hostile takeover from RusAl.

Early last week, Kommersant reported that Alisher Usmanov's Metalloinvest had acquired 3 percent to 4 percent in Norilsk. Norilsk's management is currently examining a proposal from Metalloinvest, which manages a holding group, Gazmetall, on a possible merger of the two companies.

Olga Paleva, a spokeswoman for Metalloinvest, declined to comment on the discussions, citing a confidentiality agreement.

Analysts said any merger between Metalloinvest and Norilsk, which has a stock market value of around $55 billion, would be in the form of Norilsk acquiring the former via equity and cash.

"Metalloinvest is much smaller than Norilsk, so it cannot buy Norilsk," said Vladimir Zhukov, a metals analyst at Lehman Brothers.

He added that Usmanov could bolster Potanin's position at an extraordinary shareholders' meeting, scheduled for April, by jointly voting against a replacement of the board of directors.

"My guess is that the minority [shareholders] will not support [a] change in the board," Zhukov said.