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Russian tycoon Deripaska increases stake in RUSAL
Edited by : AL CIRCLE
2 min read
Oleg Deripaska's En+ Group topped up its shareholding in UC RUSAL , where he faces a slide in profits on the back of a weak aluminium market and a possible boardroom revolt by two fellow mining tycoons who also hold stakes in the company.
The company said Deripaska's investment vehicle bought additional shares in the world's top aluminium producer on the market, raising its stake by 0.72 percent to 48.13 percent of the company.
"We believe that UC RUSAL is fundamentally undervalued and we are confident of its brilliant prospects," En+ Chief Executive Artyom Volynets said in a statement.
RUSAL shares, listed in Hong Kong, were down 1.55 percent to HK$4.45 ($0.57) by 0739 GMT on Wednesday, compared with its IPO price of HK$10.80 in 2010.
Its market capitalisation, according to Reuters data, has fallen by 25 percent during the last 12 months to $8.86 billion.
"While a marginally positive sign, we don't expect investors to follow suit unless we see more signs that RUSAL is moving toward a final resolution with (Norilsk nickel shareholder Vladimir) Potanin, which would open the way for RUSAL to receive cash dividends from the nickel producer," Bank of America Merrill Lynch said in a daily commentary.
RUSAL owns 25 percent of Norilsk Nickel , the world's largest nickel and palladium producer, and Deripaska has been resisting pressure to sell it, which could reduce RUSAL's debt and risks to the company from weak aluminium markets.
Instead, Deripaska has fought Potanin, the largest shareholder in Norilsk Nickel, over recent buybacks of Norilsk Nickel shares and argued for dividend payments instead.
Viktor Vekselberg, an oil and metals billionaire, has left the RUSAL board, arguing the company is mismanaged. A representative of New Jersey Nets owner Mikhail Prokhorov, who sold his stake in Norilsk Nickel for cash and shares in RUSAL, ceded his board seat to his deputy this week.
($1 = 7.7504 Hong Kong dollars)
The company said Deripaska's investment vehicle bought additional shares in the world's top aluminium producer on the market, raising its stake by 0.72 percent to 48.13 percent of the company.
"We believe that UC RUSAL is fundamentally undervalued and we are confident of its brilliant prospects," En+ Chief Executive Artyom Volynets said in a statement.
RUSAL shares, listed in Hong Kong, were down 1.55 percent to HK$4.45 ($0.57) by 0739 GMT on Wednesday, compared with its IPO price of HK$10.80 in 2010.
Its market capitalisation, according to Reuters data, has fallen by 25 percent during the last 12 months to $8.86 billion.
"While a marginally positive sign, we don't expect investors to follow suit unless we see more signs that RUSAL is moving toward a final resolution with (Norilsk nickel shareholder Vladimir) Potanin, which would open the way for RUSAL to receive cash dividends from the nickel producer," Bank of America Merrill Lynch said in a daily commentary.
RUSAL owns 25 percent of Norilsk Nickel , the world's largest nickel and palladium producer, and Deripaska has been resisting pressure to sell it, which could reduce RUSAL's debt and risks to the company from weak aluminium markets.
Instead, Deripaska has fought Potanin, the largest shareholder in Norilsk Nickel, over recent buybacks of Norilsk Nickel shares and argued for dividend payments instead.
Viktor Vekselberg, an oil and metals billionaire, has left the RUSAL board, arguing the company is mismanaged. A representative of New Jersey Nets owner Mikhail Prokhorov, who sold his stake in Norilsk Nickel for cash and shares in RUSAL, ceded his board seat to his deputy this week.
($1 = 7.7504 Hong Kong dollars)
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