|
|
|
 |
|
Pay your attention, please! Any reproduction, reprint or any other way of distributing "Metal Marker News" materials signed with "MetalTorg.Ru" is only possible if supplied with http://www.metal.com.ru hyper-link.
|
| |
| Prokhorov Warns Against Buyback |
Billionaire investor and Norilsk Nickel board member Mikhail Prokhorov warned on Monday that a planned $2 billion share buyback could push the company to bankruptcy.
The announcement steps up a battle between billionaire Vladimir Potanin's Interros holding and United Company RusAl, in which Prokhorov has a minority stake, for control of Norilsk, and it could represent an effort by RusAl to receive a dividend.
Norilsk's board, controlled by Potanin, voted in late August to begin a buyback of around 4 percent of its shares Oct. 29 to shore up the miner's value in the melting financial markets. Norilsk's shares closed down 0.8 percent on the MICEX Index, beating the overall market.
The repurchase would tie up capital needed to upgrade plants, service more than $8 billion of debt and complete obligatory investment programs at Norilsk's electricity assets, Prokhorov said in an open letter to Potanin.
It will also take place as the metals that the company produces are falling in price, Prokhorov said, demanding that the board meet to reverse its vote.
"I believe the decision to buy back shares worth $2 billion is at this point extremely untimely and capable of driving the company to the verge of bankruptcy," he said in the letter, posted on the blog of his Onexim investment vehicle.
A spokeswoman for Interros declined to comment Monday.
Prokhorov owns 14 percent of RusAl, which is controlled by Oleg Deripaska. RusAl is the second-largest Norilsk shareholder with a 25 percent stake purchased from Prokhorov. Potanin's Interros holds around 30 percent.
Prokhorov likely wants to prevent Norilsk from spending the money so that debt-ridden RusAl can receive larger dividends this year, said Nikolai Sosnovsky, a metals analyst at UralSib.
RusAl has debts totaling $14 billion, including loans used to buy the Norilsk stake.
"RusAl shareholders are trying their best to get some dividends from Norilsk," Sosnovsky said. "It's quite an important element of the battle."
Prokhorov's concerns about Norilsk's financial footing make sense, but the company's net debt is not too large compared with its estimated earnings for this year, said Sosnovsky and Dmitry Skvortsov, a metals analyst at the Bank of Moscow.
RusAl most recently demanded an extraordinary shareholders meeting to seat more independent directors on the board, including Fiat chairman Luca Cordero di Montezemolo.
Prokhorov's letter also appeared on his personal blog Monday afternoon but was removed within two hours. He said the letter was a formal request for the board to review the matter at a meeting Oct. 20 or any other time before Oct. 29.
Prokhorov indicated that Norilsk would need to borrow some of the $2 billion on the constricted financial market to buy the stock from investors at 4.5 times its market value.
He also brought up the fact that three Norilsk subsidiaries handed about $1.8 billion for management to a bank, which decided to spend it on Norilsk shares. Norilsk announced the move late last month.
Combined, the buyback and the subsidiaries' acquisitions reflect a desire by the "majority shareholder … to improve his financial position and increase his effective control over the company's share capital," Prokhorov said.
The Moscow Times
|
|
| |
| Novolipetsk Steel may cut production
|
Novolipetsk Steel (NLMK) is not ruling out the possibility of a reduction in its output due to the financial crisis, a spokesperson for the Russian steel producer told RBC today. As a result of the crisis, demand for steel has declined on global markets, the source said, which has primarily affected NLMK's exports to Europe and the U.S. The company is now studying market conditions, the spokesperson noted.
At the same time, however, NLMK has not changed the forecast for its 2008 financial results. Earlier, the company announced that its revenue was expected to top $13bn and EBITDA $5bn this year, while production was projected to climb 26 percent to $11.6m tonnes of steel.
RBC-News
|
|
| |
| Severstal Cuts Back At 2 Plants in U.S.
|
Severstal is putting 800 workers on part-time shifts at two of its plants in Ohio until further notice due to the economic slowdown in the United States, a negotiator for the plant's labor union said Thursday.
"So far, we have agreed that 800 people will be working only two weeks a month, while the other 1,600 will be working all the time," John Saunders, contract coordinator for the United Steelworkers with West Virginia-based Severstal Wheeling, said by cell phone.
The union said the workers would be idled at Severstal Wheeling's facilities in Steubenville and Mingo Junction.
"Mr. Mordashov told us we [currently] have no orders," said Bob Crowe, a United Steelworkers representative at the Mingo Junction plant, which produces hot-roll bands used in construction and pipe-making. "We've only got work for three days. Nobody's buying anything — construction materials, cars or appliances."
Crowe said he and his colleagues saw the trouble coming six weeks ago.
"We switched to a special regime of work — one week on, one week off, because of the lack of contracts," he said by phone. "We strongly believe it won't last for long, and we'll get new orders soon."
Alexei Mordashov, majority owner of Severstal, the fourth-largest steelmaker in the United States, earlier this week pledged further investment in the country during a tour of the company's plants there.
"Despite all its ups and downs, we believe in the long run the United States will do very well,'' Mordashov said at a conference in Washington, Bloomberg reported. "We're going to invest further in our facilities."
Severstal's press office declined to comment on the layoffs Thursday.
Russian steelmakers have been increasing their presence on the U.S. market in recent years. Evraz has bought Oregon Steel Mills, Claymont Steel Holding and IPSCO, while Novolipetsk Steel is set to close deals on purchasing Beta Steel and John Maneely by year's end.
Evraz said Thursday that it had no plans to cut production or jobs at its U.S. plants.
"The products we make in the U.S. are in good demand, and the prices on them are also quite high," the company said in an e-mailed statement.
Novolipetsk Steel said it would be able to comment on its U.S. plants only after its acquisitions were finalized.
"This lay-off has very little to do with global liquidity or steel prices," said Rob Edwards, senior metals and mining analyst at Renaissance Capital. "The key difference between Severstal and [other Russian steel firms in the United States] is that Severstal has acquired assets that are in distress," Edwards said.
"The assets are being absorbed into an existing portfolio from which synergies can be extracted. This inevitably means job losses. It was expected. Wheeling Pitt as a standalone asset was not viable."
Severstal acquired West Virginia-based Esmark and its subsidiary Wheeling-Pittsburgh Steel this summer. It also runs WCI Steel in Ohio, Sparrows Point in Maryland, SeverCorr in Mississippi, Rouge Steel in Michigan and miner PBS Coal in Pennsylvania.
The Moscow Times
|
|
| |
| RusAl Bauxite Miners Strike |
CONAKRY, Guinea -- United Company RusAl's bauxite mine in Guinea has been shut down for two days by protesters who are demonstrating over a lack of power supplies for the local community, a leader of the demonstrators said late Tuesday.
The protesters are blocking rail lines to the mine, said Moussa Bangoura, a leader of the demonstration, in an interview late Tuesday in the capital, Conakry. RusAl said in a statement that it's working with the government to resolve the situation.
Bloomberg
|
|
| |
| Judge Says Usmanov Doesn't Have to Be Party to Lawsuit |
The Moscow Arbitration Court on Wednesday turned down a petition by United Press asking that Metalloinvest half-owner Alisher Usmanov be named as a third party in a suit filed by billionaire Mikhail Prokhorov against fellow billionaire Vladimir Potanin.
Prokhorov filed the suit against Potanin and United Press, the parent company of The Moscow Times, after the newspaper published an interview in June, in which Potanin claimed that Prokhorov had reneged on an agreement to sell his stake in Norilsk Nickel to Potanin and Usmanov and buy Potanin's stake in Polyus Gold saying Prokhorov should not behave like a "Zhirinovsky in business."
Moscow Times reporter Nadia Popova was later added as a defendant.
"We believe it is necessary to involve Mr. Usmanov in the process as a third party, as the plaintiff has demanded a retraction of the entire phrase, including the part mentioning Mr. Usmanov … so the court's decision might also touch upon Mr. Usmanov's interests," said Anna Volodina, who represented United Press at the preliminary hearing.
Prokhorov's lawyer, Marina Baryshnikova, argued that granting the move would delay the legal process.
Judge Nikolai Tarasov admonished Prokhorov and Potanin during the hearing, saying that arguing in court was not going to help them finish splitting their assets.
Potanin's lawyers said they were ready to consider "reasonable offers from Prokhorov's side to settle the dispute." Baryshnikova said she would brief her client on the position of the court and the defendant.
The first hearing for the case proper is scheduled for Oct. 22.
"You understand, after all, that filing a suit to defend your business reputation is not going to help you divide your business," Tarasov said. "Like children in a sandbox, one is calling the other names."
The Moscow Times
|
|
| |
| Potanin, Prokhorov Dispute Split Status
|
An assets divorce between former business partners Mikhail Prokhorov and Vladimir Potanin appeared to be on the rocks Tuesday after the billionaires' holding companies made conflicting statements on the status of the split.
Potanin's Interros confirmed a report saying Prokhorov had announced that he would not observe a protocol on dividing their joint holdings. An Interros spokesman declined to elaborate.
Prokhorov told Potanin that he would not implement a protocol signed Sept. 14 on a split of their remaining shared assets because of a force majeure, Interfax reported Tuesday.
Prokhorov's Onexim Group brushed aside the allegations, however.
"Information on any force majeure on our side preventing us from reaching an agreement with Interros has nothing to do with reality," Onexim chief executive Dmitry Razumov said in an e-mailed statement.
Force majeure allows parties to an agreement to be freed from obligations in case of unforeseeable circumstances, like an earthquake or a revolution, that prevent either side from fulfilling the terms of the deal.
Under the protocol, which has not officially been made public but has been described in the Russian media, Prokhorov would get Potanin's stake of about 30 percent in Polyus Gold, the country's largest producer of the metal. Potanin would receive 2 percent in Norilsk Nickel in addition to the stake of around 30 percent that he already holds, as well as stakes in APK Agros and Rusia Petroleum.
Razumov, of Onexim Group, said Tuesday that the former partners had not agreed on what to do with Open Investments, a real estate investment and development company.
"To speak of a definitive deal without a decision on the fate of Open Investments is preliminary," Razumov said in the statement. "We made a proposal to Interros but have not yet received an answer. The ball is in Interros' court."
A source familiar with the situation said both sides were interested in keeping the developer.
Razumov added that a final division of Interros and Onexim's joint holdings "remains a priority."
Interros representatives were not available for comment on Razumov's statement late Tuesday.
Prokhorov and Potanin have been involved in a protracted divorce of their assets since January 2007.
In July, Prokhorov filed a lawsuit against Potanin and United Press, The Moscow Times' parent company, following claims made by Potanin in an interview in the newspaper in June that Prokhorov had reneged on an agreement to sell his stake in Norilsk to Potanin and Metalloinvest chief Alisher Usmanov. Moscow Times reporter Nadia Popova was later added to the suit.
The Moscow Times
|
|
| |
| Falling Nickel Prices Slash Norilsk's Profit |
Norilsk Nickel's net profit fell by one-third in the first half of the year as the world's largest nickel miner succumbed to rampant inflation in Russia and a 40 percent decline in the price of the metal.
Norilsk's stock on the MICEX fell 17.7 percent Friday, falling further than the 6.1 percent decline on the MICEX mining and metals index. The shares have fallen more than 60 percent from their November 2007 high.
The consolidation of newly acquired mining and power assets also helped drag down half-year profit to $2.68 billion, while an accelerating slump in metals prices and a power struggle between Norilsk's billionaire shareholders promise a tough second half to 2008.
"In the falling commodity price environment, we don't expect Norilsk stock to recover to its previous high levels," said Dmitry Smolin, mining analyst at UralSib.
Norilsk, which produces one-fifth of the world's nickel, has suffered from its exposure to the underperforming metal, while global peers BHP Billiton and Vale maintained record profits because of wider exposure to other raw materials, especially iron ore and coal.
Nickel is trading 70 percent below its record $51,800 per ton peak of May 2007. Stainless steel mills have slashed orders as consumers, fearing a worldwide recession, reduce spending on household goods.
Norilsk's first-half profit came in just above the $2.63 billion average forecast by seven analysts polled. Revenue, at $8.31 billion, also beat the forecast $8.12 billion to climb 3 percent year on year.
The company said it earned $7.21 billion from metal sales alone, 6 percent less than a year ago. Nickel revenue dropped 25 percent but was partially offset by high prices for the other metals it produces: palladium, platinum and copper.
Norilsk booked nearly $2 billion in write-offs last year on the value of its LionOre acquisition and the OGK-3 power utility at the core of a thwarted spinoff proposal.
The write-offs prompted sharp criticism from one-quarter shareholder United Company RusAl, which is engaged in an acrimonious battle with billionaire Vladimir Potanin for a greater say in running Norilsk.
Norilsk said in a statement that its first-half profit was hit by the consolidation of OGK-3, the Harjavalta refinery in Finland and the Cawse nickel property in Australia, and analysts forecast more write-offs when the company reports full-year results.
In a move opposed by RusAl, Norilsk is also spending up to $2 billion buying back 4 percent of its shares at 6,167 rubles ($240.9) each -- an 87 percent premium to its Thursday close. "This is the last chance, in the midterm, to sell a stake at such a high premium," Smolin said.
Norilsk said nickel sales fell 25 percent to $3.92 billion in the first half of 2008. Copper sales rose 35 percent to $1.59 billion, palladium sales 21 percent to $796 million and platinum sales 63 percent to $837 million.
Revenue from nonmining operations increased by 357 percent to $1.1 billion, mainly because of the inclusion of OGK-3's results.
The Moscow Times
|
|
| |
| Deripaska Gives Up Magna Stake |
In the latest signal that no one is immune from the current financial crisis, billionaire Oleg Deripaska has handed over one of his biggest overseas investments -- a one-fifth stake in Canadian auto parts maker Magna, worth $912 million -- to creditors.
Deripaska, ranked Russia's richest person by Forbes magazine, ceded his 20 million shares in Magna to an unidentified bank that financed the original deal, Magna said in a statement Friday.
In May 2007, Deripaska agreed to pay more than $1.5 billion for the Magna stake, held through his Russian Machines auto subsidiary. Since then, shares in Magna have tanked, losing nearly half their value.
Reports at the time said French bank BNP Paribas was helping finance the deal.
"Russian Machines has made a decision to terminate their participation as a shareholder in Magna International due to the current global financial crisis," Basic Element said in a statement posted on its web site Friday.
"Cooperation of Russian Machines with Magna in development of auto components business in Russia and other projects will continue as planned," the statement said.
Analysts said the news was further proof that, after a year of lavish spending, Deripaska could be forced to sell off some of his major assets.
"Deripaska is facing very big liquidity problems," an investment banker who covers the industry said on condition of anonymity, citing the sensitivity of the situation.
"He has been on a big buying spree ... and it seems like a lot of it was done through loans, and now with the current problems he is having trouble refinancing it," the banker said.
Over the past 18 months, Deripaska's acquisitions have included a 30 percent stake in Austrian construction giant Strabag and United Company RusAl's taking a 25 percent stake in Norilsk Nickel -- one of the biggest deals in the country's corporate history.
RusAl, in which Deripaska is the majority shareholder, took a $4.5 billion loan in March from a consortium of international banks to finance the purchase of the Norilsk stake. Norilsk's share price has since fallen dramatically.
Basic Element spokesman Sergei Rybak dismissed suggestions that Deripaska's firm was facing liquidity problems as "fundamentally" incorrect.
"We have the necessary liquidity," Rybak said. "The firm's debt burden is bearable."
Rybak refused to discuss the specifics of the decision to hand over the stake in Magna, saying only that "like any major company [Basic Element] is working to optimize our credit portfolio."
A spokeswoman for BNP Paribas in Moscow refused to confirm that the bank was involved but said it might issue a statement in the next few days.
The events surrounding Magna come amid a series of media reports that Deripaska could be facing liquidity issues.
On Wednesday, Vedomosti reported that Soyuz Bank, owned by Deripaska, was looking to boost liquidity by offloading around $800 million of loans.
On Friday, production was halted for the rest of the month at Deripaska's pulp plant near Lake Baikal, Interfax reported, citing the leader of the plant's labor union.
The halt was because of "temporary difficulties" connected to the payment of products due for export, Interfax reported.
Basic Element CEO Gulzhan Moldazhanova confirmed Sunday that the holding as a whole was not seeing any problems with liquidity. But she said Basic Element had stopped hiring staff because it saw "no bottom" to the credit market turmoil.
"Our country's economy and the global economy will go through a slowdown,'' she told reporters, Bloomberg reported. "Our hiring was tied to expansion'' and the start of new projects.
When the Magna deal was signed it was heralded as a major step toward increasing foreign involvement and expertise in the Russian auto industry and giving the Canadian firm greater access to the booming regional market.
Magna on Friday praised its partnership with Deripaska and promised that it was not withdrawing from the Russian market.
"Our strategic alliance with Russian Machines has assisted us in accelerating our growth on the Russian market," Magna co-chief executive Siegfried Wolf said in a statement.
"We believe that the Russian market still holds significant opportunity for us and intend to continue to pursue joint opportunities," Wolf said.
The Moscow Times
|
|
| |
| Polyus Gold given go-ahead to buy into KazakhGold |
The Board of Directors of Polyus Gold has unanimously approved the acquisition of KazakhGold shares, ONEXIM Group has announced. According to Chairman of the Board of Directors of Polyus Gold, Mikhail Prokhorov, 70 percent of the value of KazakhGold shares will be paid for by Polyus Gold shares, and 30 percent by cash. Moreover, the Board of Directors has decided to call off its buyback bid amid a recent share price increase of 40 percent, and save the resources for implementing other projects.
KazakhGold reported on Monday that Polyus Gold had offered to acquire a 50.1 percent stake in the company at $7.95 per share. What is more, Polyus Gold shareholders would pay 0.298 shares for each KazakhGold share. Polyus Gold confirmed on Friday it was in talks on a possible acquisition of 50.1 percent in KazakhGold, but said it was not clear yet if the offer would be made.
RBC-News
|
|
| |
| MMK considers share buyback |
Magnitogorsk Iron and Steel Works (MMK) does not rule out the possibility of buying back its own shares in favor of one of its subsidiaries, the Russian steel producer's press office reported today. The move may be taken in light of the company's view that its shares are significantly undervalued, due to external macroeconomic factors unrelated to the company's fundamental indicators.
The term and the size of the buyback will depend on market conditions and MMK share prices, the company said.
RBC-News
|
|
|1|2|3|4|5|6|7|8|9|10|11|12|13|>> |
|
|
 |  |  |
|
