beyondbrics

Now that Norilsk Nickel’s coffers are fast filling after the crisis, it hasn’t taken long for the uneasy truce between Vladimir Potanin and Oleg Deripaska to fall apart. The last time the two oligarchs fought for control of the world’s biggest nickel miner it was flush with cash as commodity prices soared. When they made peace in late 2008, prices had plummeted and both men’s 25 per cent stakes in the company were threatened by margin calls. As one investor puts it, “the world was about to end”.

This week’s shareholder vote for board seats at the annual general meeting revealed battle has resumed as the two main shareholders – and possibly some managers – fight for a bigger piece of Norilsk’s recovering readies ($2.65bn in net profit last year and counting).

In all this time, none of the big players seem to have paid much attention to the hapless minority shareholders even though they hold a chunky 38 per cent. The shares trade 51 per cent below their all-time high in 2008, a bone-crunching loss that might have driven even the most patient investor to protest. But, in fact, the oligarchs could legitimately argue their antics have done less damage to Norilsk’s market value than might have been expected. The RTS index has dropped 45 per cent over the same time. So the performance gap is only 6 percentage points. Not huge in comparison with the egos involved. Continue reading »