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. Last Updated: 07/27/2016

Potanin Says State Could Buy Norilsk

A state takeover of Norilsk Nickel would not be a tragedy, the company's key shareholder, Vladimir Potanin, said in an interview published Monday.

Potanin will own 54.8 percent of the company after buying out his longtime business partner, Mikhail Prokhorov, who stepped down as CEO last week.

Potanin refused to rule out the possibility of a state takeover of Norilsk in an interview with Russian Newsweek published Monday.

Asked about the possibility of the government buying up Norilsk, Potanin said: "If that happens, I will not take it as a personal tragedy, but as a change in the business climate."

Analysts say diamond monopoly Alrosa might be used as a vehicle for the possible takeover. Alrosa president Alexander Nichiporuk stepped down Friday, and his replacement is widely expected to be Sergei Vybornov, a former senior manager at Norilsk who currently heads Alrosa's investment arm.

The real issue is not whether Alrosa will be involved, but whether the state will take over Norilsk, said Sergei Donskoi, an analyst with Troika Dialog.

Some analysts doubted, however, whether the state would have to buy up Norilsk to make its influence felt.

"The question is: 'Does the state need or want to control the shares?'" said Michael Kavanagh, metals and mining analyst with MDM Bank. In any case, "Potanin won't be able to sell without government permission," he said.