London (Platts)--11Dec2012/526 am EST/1026 GMT

Russian aluminium producer Rusal, Interros, the largest shareholder in Russian metal giant Norilsk Nickel, and investment group Millhouse have entered into an agreement aimed at settling the shareholder conflict at Norilsk, the companies said Tuesday.

The deal, initially revealed last week, appears to put an end to a long-running shareholder feud at Norilsk between Vladimir Potanin's Interros and Oleg Deripaska's Rusal.

Norilsk Nickel is the largest diversified mining and metals company in Russia, the world's largest producer of nickel and palladium and one of the world's largest producers of platinum, rhodium, copper and cobalt.

Rusal is the world's largest producer of aluminium, in 2011 accounting for approximately 9% of global production of both aluminium and alumina.

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All parties' efforts "will be integrated to deliver improved corporate governance and to increase the value of Norilsk Nickel in the interest of its all shareholders," the companies said in a statement.

As initially announced last week, Rusal, Interros and Millhouse have agreed to redeem all quasi-treasury shares held by Norilsk Nickel amounting to 16.99%.

Rusal and Interros will sell 3,873,537 and 5,420,464 shares in Norilsk Nickel, respectively, to Millhouse -- an investment company controlled by Russian oligarch Roman Abramovich -- at $160/share.

Following the redemption of all quasi-treasury shares held by Norilsk Nickel, Interros, Rusal and Millhouse will hold approximately 30.3%, 27.8% and 5.87% shares in the company, respectively. As such, the parties will deposit approximately 20% of Norilsk Nickel shares to a nominated escrow account.

The parties also agreed that the board of directors of Norilsk Nickel shall be composed of 13 members out of which four will be nominated by Rusal, four by Interros, and one by Millhouse. The parties will also nominate one independent director each and give minority shareholders an opportunity to elect one director.

A board meeting of Norilsk Nickel will be held on December 17 where decisions to appoint Potanin, the president of Interros, as CEO of Norilsk Nickel and to call an extraordinary general meeting of shareholders to elect a balanced board of directors of Norilsk Nickel and to introduce changes into the company's charter will be considered.

The three companies said the agreement would enable more efficient investment, capital expenditures and sales policy at Norilsk, but also improve the company's corporate governance.

--Andy Blamey, andy_blamey@platts.com
--Edited by James Leech, james_leech@platts.com

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