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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, Oct. 1


The St. Petersburg International Innovation Forum 2014 kicks off today at Lenexpo, where it will be presenting the latest and greatest ideas until Oct. 3. Focusing on economic development and the decisions and measures necessary to encourage development in Russias most important industries, the event is a possibility to discuss the innovations currently available in a variety of fields.


Representatives of the Russian and international media industries arrive in St. Petersburg for the first ever International Media Forum being hosted by the city until Oct. 10. With a variety of events on tap, including workshops, lectures and film screenings, the event plans to reemphasize the citys reputation as the countrys culture capital and as an emerging market and location for the visual arts.



Thursday, Oct. 2


The celebration of the bicentennial of the birth of Mikhail Lermontov continues with todays free exhibition in the citys Lermontov Library at 19 Liteiny Prospekt. Titled Under the Rustling Wings, the temporary exhibition will feature the costumes and scenery used in the 1917 production of Lermontovs play The Masquerade, which he wrote in 1835 when he was only 21 years old.



Friday, Oct. 3


Learn more about how to manage and evaluate employee performance during SPIBAs Human Resources Committee meeting this morning on Employee Assessment: Global and Local Trends. Starting at 9:30 a.m., the discussion will touch on such topics as the partnership between HR and business, reliable assessment strategies and more, with Tatiana Andrianova, the head of the SHL Russia and CIS branch in St. Petersburg, as the featured guest. Confirm your participation by Oct. 2 by emailing office@spiba.ru or calling 325 9091.


AmChams Procurement Committee Meeting is at 9 a.m. this morning in their office in the New St. Isaac Office Center on Ulitsa Yakubovicha.



Saturday, Oct. 4


Wine and cheese lovers will get their chance to revel during Scandinavia Country Club and Spas Wine Market Weekend. Going on today and tomorrow, wining diners can listen to live music, take part in culinary classes and, of course, sample a variety of fine wines from around the world. The cost of admission is 400 rubles ($10.30) for adults and 200 rubles ($5.15) for children.



Sunday, Oct. 5


Look for the latest fall fashions at the Autumn Market today in Freedom Anticafe at 7 Kazanskaya Ulitsa. The minimarket plans to offer clothes more flattering than the puffy jackets that are a staple of the citys cold-weather fashion, while offering the same amount of protection from the biting winds blowing off of the Baltic.



Monday, Oct. 6


SKA St. Petersburg, the citys KHL affiliate, welcomes Slovakian club HC Slovan in a match-up tonight at the Ice Palace near the Prospekt Bolshevikov metro station. The puck drops at 7:30 p.m. and tickets can be purchased on the clubs website or in person at either the arenas box office or the clubs merchandise store on Nevsky Prospekt.



Tuesday, Oct. 7


Learn more about Russias energy industry at the St. Petersburg Energy Forum that begins today and runs through Oct. 10. Attracting industry experts and political and business representatives, the forum plans to welcome more than 350 plus companies and their representatives to discuss the future of Russias largest economic sector.



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