Bloomberg News

Sual Billionaires Said to Push for Rusal Veto During Dispute

June 29, 2012

Len Blavatnik and Viktor Vekselberg are seeking veto power over major transactions at United Co. Rusal, escalating a feud with fellow billionaire Oleg Deripaska over strategy at the world’s largest aluminum maker, two people familiar with the matter said.

Blavatnik and Vekselberg’s Sual Partners Ltd., which owns 15.8 percent of Rusal, are asking all shareholders to vote on amending the Russian company’s charter to reflect the veto power that exists in a shareholder accord signed in 2007 when Rusal was formed, the people said, declining to be identified because the information isn’t public.

Vekselberg quit as chairman of Rusal in March, citing a “deep crisis” at the company after Deripaska rejected several offers to sell Rusal’s 25 percent stake in OAO GMK Norilsk Nickel, the world’s largest miner of the metal. Deripaska said at the time that there is “not even a shallow crisis at Rusal,” while the market situation is difficult.

Rusal’s board has already recommended rejecting Sual’s proposal on changing the company’s charter, which would need the approval of 75 percent of shareholders to pass. Deripaska’s En+ Group controls 47 percent of Rusal, billionaire Mikhail Prokhorov’s Onexim Group has 17 percent and Glencore International Plc has 8.8 percent.

Bolster Case

Shareholders will meet Aug. 3 to vote on the Sual proposal, Rusal said. Passing the amendments would violate the rules of the Hong Kong stock exchange, where the company’s shares are listed, Rusal said in a regulatory filing. Both Rusal and Sual officials declined to comment or be identified.

Sual may use the rejection to bolster a case it filed against En+ and Glencore in London, or it could use the rebuff as a trigger to abandon other agreements it has with Deripaska, such as the right of first refusal in selling its stake, said Dmitry Lobachyov, a lawyer at Moscow-based Yukov, Khrekhov & Partners, who isn’t involved in the case.

Sual in April filed a claim in London against En+ Group, Rusal and Swiss commodities trader Glencore (GLEN), accusing them of breaching shareholder accords by signing long-term contracts without its consent.

Deripaska’s En+ will have a right to vote, Andrey Goltsblat, managing partner of Goltsblat Berwin Leighton Paisner, said by phone from Moscow. Changes to a charter are not financial transactions, and no “interested party” issue arises to exclude major shareholders from the voting, he said.

The amendment isn’t good for minority shareholders because it will put too much power in the hands of the battling majority shareholders, said Kirill Chuyko, an analyst at UBS AG in Moscow.

To contact the reporter on this story: Yuliya Fedorinova in Moscow at yfedorinova@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net


Best LBO Ever
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus