New claims have been filed in London to escalate the legal dispute between Rusal and Nornickel CEO Vladimir Potanin. Rusal is one of world’s biggest aluminium producers. Rusal has filed new lawsuits against Nornickel CEO Potanin.
Rusal has a number of grievances, mainly focusing on Nornickel and Potanin controlling the decision-making process. They also target Atomyze’s digital asset platform and an employee incentive program that is controversial.
Nornickel, a global player on the metals market, produces nearly 40% of world palladium, and has a large share of nickel. The ramifications are far-reaching, as this dispute goes beyond Russia.
Rusal’s legal action could have a significant impact on dividend policies, commodity prices, and stock performance.
Rusal’s Claims
Rusal has been challenging Potanin for years, who controls a stake of 27.8% in Nornickel. Potanin has been accused of using his 36% stake to undermine the fairness of governance. Rusal believes this is because Potanin’s position was abused.
Atomyze, a digital platform Potanin created to tokenise Nornickel assets and an employee incentive program are at the heart of Rusal’s claims. Rusal says that both schemes serve Potanin’s interests in a disproportionate way.
Rusal’s claims suggest deeper tensions in governance, since it argues Potanin’s initiatives distort profit distributions and marginalize other shareholders.
What are the stakes?
Rusal could have a direct impact on Nornickel’s stock value, dividends and stability.
Nornickel’s dividends have been high for the past decade under a shareholder agreement signed in 2012 that guarantees steady dividends both to Rusal, and Roman Abramovich’s Crispian Investments.
The agreement expires in 2022. Potanin can now influence the dividend policy.
Rusal now questions how dividends can be managed in the absence of these protections.
Nornickel’s profit allocation could change if the London Court sides with Rusal. This may lead to higher payouts, or a shift in Nornickel’s cash reserve.
The impact of Nornickel on the global metals market cannot be underestimated.
Any disruptions in its operations, as the world’s leading producer of the metal palladium – a vital component for automotive and electronic industries – could cause volatility to commodity prices.
An extended legal dispute could distract Nornickel’s management, hinder its production capability and increase prices on a palladium-scarce market.
All those with metal ETFs and automakers who rely on palladium as well as industrial users of nickel could feel the effects.
Next steps for shareholders
Investors are encouraged to keep an eye on upcoming court cases and settlements, which could determine Nornickel’s future dividend policy and profit sharing structure.
Nornickel’s statements about operational changes or financial forecasts may also indicate how the management has responded to Rusal’s claims.
Nornickel stock and commodity prices could be affected by even small changes in Nornickel production estimates.
What’s the stake for investors in this post Rusal’s new claims against Nornickel’s Potanin? This post may change as new information becomes available.
