Aluminum Giant, GAZ in Deal

A deal appears to have been struck between Oleg Deripaska, head of metals giant Siberian Aluminum, and Nikolai Pugin, head of the nation's No. 2 automaker, GAZ, that could clear the way for the former to put its representatives on the Nizhny Novgorod-based auto plant's board.

Siberian Aluminum, which refused to officially comment on its activities regarding GAZ before a meeting in Moscow on Wednesday between the two directors, has been buying up shares in GAZ through its affiliated structures and has acquired more than 25 percent of the factory's shareholding.

On Wednesday evening the group's press service released their first brief commentary on the course of negotiations with Pugin — namely that they are going well and should be wrapped up in a week's time. Pugin and Deripaska first came to the negotiating table last Thursday in Nizhny Novgorod.

Earlier GAZ had refused to acknowledge Siberian Aluminum as a shareholder in the company and analysts had predicted the management would resist any change in authority at the plant. It was even suggested that the factory's president could form an alliance with the Alfa Group holding, which has been openly buying up shares in the enterprise.

But if Pugin had once given the impression he was ready to fight it out with GAZ, then he seems to have reevaluated the situation.

A source close to the negotiations said Pugin acknowledged Siberian Aluminum was the largest shareholder in GAZ and should therefore play a role in the management of the factory.

An agreement is to be drawn up on the basis of the negotiations, as is the mechanism for including Siberian Aluminum's representatives on the board of directors, the source said.

Though the source said Pugin would keep his post, Interfax reported Thursday that a Siberian Aluminum spokesman refused to comment on whether the company would propose their own candidate for the post at a board meeting planned for next Wednesday.

Siberian Aluminum will reveal the extent of their stake and plans for the factory at the meeting, the representative said.

Pugin's adviser Gennady Suvorov said "the issue of changing the management was discussed," at the negotiations.

Siberian Aluminum representatives could be put on the board via a general meeting of shareholders of the factory. Suvorov said the parties discussed holding such a meeting, but so far no decision has been made.