UC Rusal criticized Interros' proposal on the principle of calculating Norilsk Nickel dividends

The second largest shareholder of Norilsk Nickel, UC Rusal (27.8%), criticized Vladimir Potanin's Interros proposal to minimize the dividends of the metallurgical company, reports . RBC

At the end of March, Interros advocated the payment of dividends from free cash flow, rather than EBITDA, and in the amount of 50-75% of this indicator, explaining this by the need for large investments by the company in development and the environment. The argument came after the fuel spill incident near Norilsk in May 2020, as a result of which Norilsk Nickel paid a huge fine of 146.2 billion rubles.

UC Rusal does not consider the change justified. “In recent years, the level of development of the investment program by Norilsk Nickel did not exceed 75%, so there is no such direct connection between the volume of dividends paid and the need to increase their spending, as Interros represents,” the publication quotes the Deputy General Director of UC Rusal, a member of the Board of Directors Norilsk Nickel Maxim Poletaev.

According to analysts at Veles Capital, due to a change in the dividend policy in accordance with the proposals of Interros, UC Rusal would have lost about $1 billion in 2021.

• Now, there is an agreement between the largest shareholders of Norilsk Nickel, according to which dividends must be paid twice a year and in the amount of at least $1 billion. Nornickel annually sends shareholders about 60% of EBITDA (in 2019 it amounted to $7.92 billion). The document expires in 2023.
• The corporate dispute over Norilsk Nickel's dividends has been going on for more than 10 years. In 2020, Potanin proposed limiting the company's dividends to a minimum level (up to $1 billion) due to the impact of the coronavirus pandemic in order "not to irritate people", and called the agreement a "rudiment" that allows putting pressure on Norilsk Nickel.
• In 2021, Norilsk Nickel is preparing to increase capital investments by almost 80% ($3-3.4 billion), keeping them at this level until 2025. The decision was made against the backdrop of the start or development of investment cycles for major projects: the third stage of expanding the capacity of the Talnakh Concentrator (TPF) to 18 million tons and the environmental Sulfur project.