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. Last Updated: 07/27/2016

Potanin for Spinoff of Norilsk Power Assets

Vladimir Potanin, the largest shareholder in Norilsk Nickel, is in favor of spinning off $7 billion of noncore power assets from the metals giant, supporting another large stakeholder.

"I support the spinning off of assets, they are hanging on our balance without creating any value. They may be spun off or sold. I prefer the spin off," Potanin told reporters Friday.

Potanin and fellow billionaire Alisher Usmanov on Wednesday agreed to form a global mining and metals giant on the basis of their assets and invited the country's richest man, Oleg Deripaska, to join them.

Potanin has a 30 percent stake in Norilsk, the world's largest producer of nickel and platinum-group metal palladium. Uzbek-born Usmanov has a 50 percent stake in the country's largest iron ore miner and big steel producer Metalloinvest.

Deripaska controls the world's No. 1 aluminum producer, United Company RusAl, which recently bought a stake of 25 percent plus two shares in Norilsk from Potanin's former business partner, Mikhail Prokhorov.

Prokhorov retained a holding in Norilsk as he received 14 percent of RusAl in exchange for his stake along with an undetermined sum of cash.

Potanin said Friday that he had not yet received a reply from Deripaska.

On Tuesday, RusAl said it supported spinning off Norilsk's energy assets rather than selling them, as currently planned by Norilsk.

Potanin said Friday that he had informed Deripaska about his attitude toward the spinoff and asked Norilsk CEO Denis Morozov to sort out the issue with RusAl's management.

Norilsk decided in February to sell the assets via separate tenders after Prokhorov blocked their spinoff in December by abstaining from voting at an extraordinary shareholders meeting.

It unveiled plans in March last year to spin off its noncore electricity assets and list the new company, EnergoPolyus, in May 2008. It has said the company would be worth $7 billion minus 15 billion rubles ($634 million) of transferred debt.

Wholesale power producer OGK-3, which Norilsk acquired for $4.6 billion, was to form the core of EnergoPolyus. Controlling stakes in several territorial generating companies, known as TGKs, were to have formed much of the rest.

Norilsk owns 65.15 percent of OGK-3 as well as 27.69 percent of TGK-14, 7.37 percent of TGK-1 and less than 2 percent of OGK-5 and TGK-5.

Norilsk so far has sold its stake in OGK-5 for $106 million.

n RIA-Novosti reported that Prokhorov's Onexim Holdings, which controls power generator TGK-4, may bid for stakes in other power producing and trading companies, Bloomberg said Sunday.

Onexim will propose candidates for the board of TGK-4, which operates 25 power plants, Onexim executive director Yulia Basova said, the news service reported. The holding bought a 32 percent state stake in TGK-4 and later acquired new shares sold by the generator to boost its ownership to 51 percent, RIA-Novosti reported.