Prokhorov flags support for taking revised Norilsk Rusal offer
The statement, released on the website of Prokhorov’s investment vehicle, Onexim, indicated Prokhorov throught the pricing of the latest Norilsk offer was fair, and that it would enable an exit from a corporate deadlock, while lowering Rusal’s debt."I consider that Rusal should be favourable to accepting the offer for the sale of 20 % of the shares of Norilsk nickel. The situation, obviously, is at deadlock, and one of the parties should decide on an exit. I consider that offer, with a premium to the market and a price of $12.8 billion dollars corresponds to the fair cost of the package. Sale of these shares will allow Rusal to considerably lower its debt loading and to raise the company’s stock value. Onexim intends to support the given offer."The announcement comes only a day after Rusal CEO, Oleg Deripaska, said in an interview with CNBC that he would not be selling Rusal’s stake in Norilsk.Speaking with Business RT, Andrey Lobazov, metals analyst at IFC Metropol, said he doesn’t think the Onexim statement is surprising, noting that other Rusal shareholders would like to see a deal.“In fact, the thing that Rusal´s shareholders support the idea of a buy-back deal isn’t the news and Prokhorov’s words weren’t a surprise at all. For example, earlier the press widely discussed Vekselberg and his SUAL Partners being in favour of the deal.”Lobazov says he believes the statement from Onexim reflects the price and the fact it could go a long way to reducing Rusal’s debts. “As I see it, he just wanted to say at the moment that the premium to the market of about 43% was quite adequate. Rusal does have a huge debt burden. We expect that to have reached$11 billion by the end of 2011, which a net debt / EBITDA ratio forecast to reach 4.1.”UniCredit metals analyst, Marat Gabitov believes that a better offer is possible.“As far as I remember Prokhorov also supported the previous Norilsk Nickel offer, but it’s logical that Deripaska, being a controlling shareholder, wants to get the most out of the sale. And, I think, that Norilsk Nickel have enough money to make a better offer.”Gabitov also believes that Rusal’s debt situation is not pressing so heavily as to force an acceptance of the existing offer from Norilsk.“We estimate the net debt at $11.75 billion as of the end of 2010, which equals 3.5 EBITDA. But I think, that’s not too pressing for Rusal, as the Company planned to refinance $5 billion of that in 2011 by issuing Eurobonds, Chinese bonds, etc.So, I don’t think Rusal desperately needs those $12.8 billion Norilsk Nickel offers.”Gabitov added that the recent legal suspension of Norilsk sale of a stake to Trafigura Baheer and share buyabck, which could last until the March 11, makes Rusal’s position even stronger.