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. Last Updated: 07/27/2016

Lion's Share in Buyback Goes to Norilsk Owners

VedomostiMikhail Prokhorov
Vladimir Potanin and Mikhail Prokhorov, the controlling owners of Norilsk Nickel, got about 83 percent of the cash the company paid out to buy back shares as profit surged last year, amid surging world prices for the miner's nickel and palladium.

Norilsk has bought back about 12 million of its own shares, a 5.85 percent stake, Denis Morozov, Norilsk's deputy general director, said Friday. Bektanco Holdings, controlled by Potanin and Rinsoco Trading, controlled by Prokhorov, each sold 2.44 percent stakes in Norilsk back to the company in the offering.

Potanin and Prokhorov held 50 percent of Norilsk, the company said in 2003.

The pair's combined worth was more than $10 billion, making them Russia's fourth- and fifth-richest individuals, Forbes magazine reported in April.

The men made much of their money by buying up state assets during the 1990s, including Norilsk Nickel, the world's largest miner of nickel and palladium.

"I think some foreign investors were perhaps at a disadvantage due to the complicated procedure," said Aivaras Abromavicius, who co-manages $800 million of Eastern European assets, including Norilsk shares, for East Capital Asset Management in Stockholm. "A buyback is a good thing but the conditions need to be equal."

Morozov declined to comment on the billionaires' current holdings in Norilsk. The buyback ends on Tuesday.

"The purpose of the buyback was to deliver money to shareholders, the resolution was made unanimously by the board on Dec. 2, 2004, and this outcome fits the purpose," Morozov said.

Norilsk said in December it would buy back as much as 21 billion rubles in shares as rising metals prices boosted earnings. The company was offered 59.8 million shares for the buyback, Morozov said today.

Potanin and his partners boosted their stake in Norilsk in 2001, when the company took over its former parent Norilsk Nickel through a series of share swaps and sales of new equity.

Analysts said at the time that the reorganization diluted the holdings of foreign shareholders in Norilsk.