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Prokhorov, Potanin to Split Interros Assets

Published: February 2, 2007 (Issue # 1242)



  • Prokhorov speaking with the captain of a Norilsk Nickel ship in April. He should get $7.5 billion for his Norilsk shares.
    Photo: Denis Kozhevnikov / Itar-Tass

MOSCOW Mikhail Prokhorov will resign as chief executive of Norilsk Nickel and divide his assets in holding company Interros with longtime business partner and Interros president Vladimir Potanin, Interros said Wednesday.

Prokhorov, who should pocket $7.5 billion from his Norilsk shares alone, said he intended to create an electricity holding that would be part of Interros.

Potanin will buy out Prokhorovs blocking stake in Norilsk and other assets within Interros to ensure a new level of freedom in carrying out executive decisions, Interros said in a statement. The two billionaires founded Interros in 1990.

It was not clear who would replace Prokhorov at Norilsk, but Potanin would be the de facto head with a stake of around 55 percent. The statement said Potanin had been nominated to the companys board of directors.

Norilsk shares barely reacted to the news, inching up 1.85 percent to close at $165.50 on the RTS.

Prokhorov said he seriously intended to apply himself to the business of traditional and alternative electricity production.

For his shares in Norilsk, Prokhorov will get at least $7.5 billion to help get his new venture started, said Vladimir Zhukov, metals and mining analyst at Alfa Bank.

Unified Energy Systems is putting stakes in 18 power-generating companies on the auction block over the next three years. Prokhorov would be able to invest in 14 of the so-called OGKs and TGKs, whose combined market value is around $42.5 billion, said Dmitry Terekhov, electricity analyst at Antanta Capital. This means Prokhorov would be able to snap up at least 18 percent of Russias generating capacity.

Alternative energy assets will also be high on Prokhorovs shopping list, analysts said. A 35 percent stake in a U.S.-based producer of electric fuel cells, Plug Power Inc., will go to Prokhorov as part of the split, as will Smart Hydrogen, a joint alternative-energy venture between Norilsk and Interros.

Prokhorov said he believed that hydrogen technologies will allow Russia to establish an innovative economy.

As for Norilsk Nickel, Zhukov said it hardly mattered who would take the helm. After Prokhorov, you can think of Norilsk as a train that has been put on rails. It doesnt matter that much who is running the train. The company is set.

Under Potanin, Norilsk is likely to start making acquisitions abroad, Zhukov said. Prokhorov presided over the consolidation of Norilsks gold assets into Polyus Gold, which was spun off in 2006. With a market capitalization of more than $9 billion, it is the largest gold producer in Russia and widely viewed to be Prokhorovs greatest success in finance and management. Interros will maintain control of the company under Potanin.

Earlier this month, Prokhorov was at the center of an international scandal when French police detained him at a lavish alpine getaway during an investigation into a high-class prostitution ring. He was released after four days of questioning, and no charges were filed.

But Wednesdays news left some wondering whether the affair had prompted Prokhorovs split with Potanin. The move is meant to distance that whole French issue from Interros, which is very concerned with protecting its image in the West, said Terekhov of Antanta Capital.

But Sergei Donskoi, analyst at Troika Dialog, said the incident was one factor among several, but not the main factor that led to the divorce.





 


ALL ABOUT TOWN

Wednesday, July 23


SPIBAs Legislation & Lobbying Committee invites everyone interested in the practical aspects of courts and procedural law to todays Legal Debating Club at 9:30 a.m. at the Mertens House, 21 Nevsky Prospekt, office 506. Visit spiba.ru for more details.


Take advantage of the sunny summer days and participate in Beach Games 2014, which runs through July 27 in Sestroretsks Dubki Park.



Thursday, July 24


Liliana Modiliani, a well-known Russian stylist, will talk about choosing clothes that fit during her lecture at 7 p.m. at the Pryamoy Efir art club, 13 Viborgskoe Shosse.



Friday, July 25


Discuss Russias economic and political prospects for 2014 during a Business Breakfast organized by SPIBA at 9.30 a.m. in the Bank Saint-Petersburg office at 64


Malookhtinsky Prospekt.


Start your weekend with adorable miniature pigs at the Squealing Pig festival at 7 p.m. this evening in the Karl & Friedrich restaurant, 15 Iozhnaya doroga, on Krestovsky Island.



Saturday, July 26


Hundreds of brand-new and retro cars, drag and drift shows, test drives and karting are planned for the Avtobum-2014 festival, which will take place in front of the RIO shopping center at 2 Fuchika Ulitsa.


Participants in todays SaniDay Summer competition will impress visitors with their hand-made, unusual and hilarious boats, which will race at the Igora Resort near the 54th kilometer on Priozerskoe Shosse.


Metro Family Day will include both serious lectures for adults and master-classes for children, making the event interesting for the whole family. To participate, come to Kirov Park on Yelagin Island.


Photography will be the focus of todays Photosubbota, which features lectures by famous photographers, meetings with photo schools and studio representatives, and participation in a photography competition. The event starts at noon at Petrokongress, 5 Lodeynopolskaya Ulitsa.


If you like cycling, make sure to visit the Za Velogorod Festival with its retro bike exhibition, market and live music. The second round of the Leningrad Criterium race will also take place during the event at Petrovsky Arsenal in Sestroretsk.



Sunday, July 27


Navy Day will be celebrated with a weapon and military transportation exhibition, self-defense master classes and concerts. The event starts at 1 p.m. in the 300th Anniversary Park of St. Petersburg.



Monday, July 28


Dont miss a chance to see the latest achievements in robotics during the RoboDom interactive show, exhibiting more than 150 robots. The show will be at BUM centre, 22/2 Gzhatskaya Ulitsa, until Aug. 3. The entrance ticket costs 350 rubles ($10).



Tuesday, July 29


A video of a Queen concert from 1986 will be shown today at 8 p.m. in Yaschik, 50/13 Ligovsky Prospekt.



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