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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

Thursday, Nov. 27


The Customs and Transportation Committee for AmCham meets this morning at 9 a.m. in their office on Ulitsa Yakubovicha.


Tickets are still available for local KHL team SKA St. Petersburgs showdown with Siberian club Metallurg Novokuznetsk tonight at 7:30 p.m. in the Ice Palace outside the Prospekt Bolshevikov metro station. Tickets can be purchased on the teams website, at the arena box office or in their merchandise store on Nevsky Prospekt.


Celebrate one of Russian literatures most tragic figures during Blok Days, a two-day celebration of the 134th anniversary of the poets birthday. The tragic tenors work, which led to writer Maxim Gorky to hail him as Russias greatest living poet before his death in 1921, will be recited and meetings and discussions about his contributions to the Silver Age of literature in St. Petersburg will be discussed in the confines of his former residence.



Friday, Nov. 28


Join table game aficionados at the British Book Centers Board Game Evening. Held every Friday at 5 p.m., aficionados and amateurs alike can come take part in a variety of different games that test ones intellect and cunning.



Saturday, Nov. 29


Cats, dogs, birds, rodents and reptiles are just some of the things that will walk and crawl at Lenexpo convention center this weekend as part of Zooshow, a two-day exhibition featuring not only mans best friends but a four-legged fashion show, as well as a food fair that will help pet owners find out more about which kibbles are best for their hungry pets.



Sunday, Nov. 30


Remember the 75th anniversary of the beginning of the Russo-Finnish war in 1939 during todays reenactment titled Winter War: How it Was. More than 200 people will take part in recreating the opening salvoes of the battle for the north in Kamenka, a small village situated between Vyborg and St. Petersburg, using authentic equipment and vintage vehicles from the era. The faux battle begins at 2 p.m.



Monday, Dec. 1


Serbia filmmaker Emir Kusturica is the featured guest this evening at the Lensovet Palace of Culture the Petrograd Side. Fans of the director will get the chance to watch his movie Black Cat, White Cat, as well as ask questions about his award-winning filmography. Tickets for the event, which starts at 7 p.m., start at 2,000 rubles ($42.50).



Tuesday, Dec. 2


Today is the final day of Takoy Festival, a three-week program of plays based on the works of Dostoevsky, Remarque and other famed European writers, whose work is transcribed for theatrical performances. Tonights festival finale is Fathers and Sons, a two-act drama staged by the Novosibirsk Academic Drama Theater based on Turgenevs classic about familial relations.



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