Rusal files lawsuit in London claiming Interros, Potanin breached Nornickel agreement

MOSCOW. Oct 24 (Interfax) - Rusal filed a lawsuit in the High Court of Justice in London on October 21 against Norilsk Nickel (Nornickel) president Vladimir Potanin and Whiteleave Holdings Limited, an affiliate of Potanin's Interros Group that holds shares in Nornickel, the Russian aluminum company reported in a press release.

Rusal said it believes that the defendants violated the Nornickel framework shareholder agreement signed in December 2012, resulting in losses for Rusal.

A court hearing for the lawsuit has not been set yet.

"Rusal's claims are based on Mr. Potanin's failure to fulfill his duties as Norilsk Nickel's managing partner and CEO. Under the management of Mr. Potanin, Norilsk Nickel lost a number of assets that played a key role in group's activities. This resulted in Norilsk Nickel and its shareholders suffering significant losses," the company said.

Rusal said Nornickel "requires a professional independent executive with the necessary competencies as CEO." The company said it is also demanding "compensation and other remedies for losses caused by Mr. Potanin," the value of which must be determined by the court.

"Rusal continuously tried to enter into constructive dialogue with Mr. Potanin for an out-of-court settlement. However, these attempts have been unsuccessful. Now Rusal must follow the dispute resolution procedures set in the 2012 Framework Agreement, which require Rusal to bring claims in the High Court in London," the company said.

The Nornickel shareholder agreement expires in December 2022. The third party in the agreement is Crispian, a company owned by Russian businessmen Roman Abramovich and Alexander Abramov and their partners.

Part of the agreement is a dividend formula under which the Russian mining giant paid out dividends equivalent to 60% of EBITDA. Amid growing capital expenditures, Potanin proposed several years ago to revise the formula and reduce dividends. The final dividends for 2021 were the last to be calculated by this formula.

Potanin said in July that in 2022 and 2023 shareholders should not expect the same level of returns that the company's dividend payments provided in the past given additional expenditures and the expiration of the shareholder agreement.

Potanin's Interros owned about 35.95% of Nornickel before the cancellation of 0.5% in treasury stock this fall. Rusal controlled 26.25%, Crispian held about 4% and the free float was about 33%.