“Financial divorce” in world’s No 1 nickel producer

Two of Russia’s richest men have decided to split their business. Interros co-owners Vladimir Potanin and Mikhail Prokhorov have joint holdings worth around $US 30 BLN.

Their “financial divorce” may open up a window of opportunity for the state to get a stake in one of their main assets, Norilsk Nickel, the world's largest nickel producer.

This is how the split goes: the shares of Norilsk Nickel will be bought out by Mr Potanin and managed by his company, Interros. Their co-owned energy and hydrogen assets will go to Mr Prokhorov.

The latter will also retain shares in other Interros assets – gold producer Polyus Zoloto, Rosbank, media-holding Prof-Media and Russia's largest engineering company, Power Machines, – and manage them by means of a new investment vehicle.

According to Interros, the restructuring will be completed by the end of this year. By that time the question of whether the state or a foreign strategic investor will join Norilsk Nickel could be answered.

The state-owned company Alrosa is rumoured to have a long-standing interest in the metal giant. However, analysts are sceptical about the chances the state makes such a move.

''The company is a good tax-payer, it’s very profitable; from that point of view it can be interesting to the state, but I don’t see it as a strategic thing,“ says  Vladimir Katunin, analyst with Aton. ”I think it’s well-managed. Its owners – let’s say Mr Potanin from now -  they don’t make any political moves, they don’t try to form an opposition to the president or anything of that sort. So I don’t see why that asset is so important to the state, but it’s a good, profitable operation and it’s well-managed. I don’t think there is any problem with it.''

Mikhail Prokhorov will remain General Director of Norilsk Nickel until the end of 2007. He has yet to choose a name for the new company he is planning to create in order to hold the energy assets he is going to acquire once Interros goes to Mr Potanin.