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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

Friday, Dec. 19


Test your mastery of parlor games during Game Evening at the British Book Center. Learn how to play a variety of classic, mentally challenging games and use your newly acquired skills to crush weaker opponents. The event beings at 5 p.m.



Saturday, Dec. 20


The citys Babushkina Park on Prospekt Obukhovskoy Oborony will be invaded by dozens of rocking-and-rolling Santa Clauses during todays Santa Claus Parade. Not only will they parade through the park but there will also be competitions amongst the festively-clad participants and a musical master class. There will also be a prize for the best-dressed Santa Claus.


Stock up your record collection during the Vinyl Christmas Sale at the KL10TCH bar on Konyushennaya ploschad today. Spend the afternoon perusing the records for sale while listening the classic, clean sound of records spinning out hits from a variety of musical genres and time periods.



Sunday, Dec. 21


The Zenit St. Petersburg basketball team returns to the northern capital this evening for a matchup with Krasny Oktyabr, a Volgograd-based basketball club. Tickets for the game, which tips off at 6 p.m. this evening, can be purchased on the clubs website or at their arena, Sibur Arena, on Krestovsky island.


Satisfy your sugar cravings during Sweet New Year, an ongoing seasonal festival at the Raduga shopping center. Each weekend of December will welcome hungry visitors to taste hundreds of different kinds of desserts made from a plethora of sweet treats. Workshops are open to visitors and seasonal gifts can also be purchased for those rushing to finish their New Year shopping.



Monday, Dec. 22


Pick out the latest fashions as holiday gifts for loved ones or as early presents for yourself during the Christmas Design Sale at Kraft on Obvodny Kanal, starting on Dec. 20 and continuing through Dec. 27. Designer clothes will be on sale every day of the week or you can buy something more festive to decorate the home while sipping on hot coffee and perusing the various master classes.



Tuesday, Dec. 23


Meet Arctic explorers Fedor Konukhov and Viktor Simonov during SPIBAs and Capital Legal Services event Arctic Expedition this morning in the Mertens House business center at 21 Nevsky Prospekt. The meeting will discuss the explorers ongoing eco-social project and how companies can use the project as a unique marketing opportunity. Email office@spiba.ru by Dec. 22 if you wish to attend.



Wednesday, Dec. 24


The Anglican Church of St. Petersburg we will be holding a Christmas Eve service at 7 p.m. led by Rev Wm. Shepley Curtis of the Episcopal Church. The service will be held at the Swedish Church at 1/3 Malaya Konyushennaya Ulitsa.



To have your event included in All About Town, email tot@sptimes.ru



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