A regional court in Siberia has ruled in favor of aluminum giant RusAl, which was seeking to void the buyback of a 7.7 percent stake in Norilsk Nickel that took place last year.
The Krasnoyarsk Arbitration Court declared the decision by the nickel producer's board of directors to carry out the buyback invalid, upholding RusAl's claim that Norilsk Nickel had violated the law on foreign investment in companies of strategic importance for the country, the aluminum company said in a statement late Tuesday.
The foreign-registered affiliates of Vladimir Potanin's Interros group that bought back the shares increased their control over the nickel company illegally, because the deal was not authorized by the government's foreign investment commission, RusAl said. Interros holds 28 percent in Norilsk Nickel, while RusAl owns 25 percent.
The court ruling marks the first significant victory of the aluminum company in its long-running battle with Interros for control over the nickel producer.
RusAl might use the court decision to exclude the shares representing the 7.7 percent stake from voting on the strategic issues at shareholders meetings, since they had been acquired illegally, said Andrei Goltsblat, managing partner at Goltsblat BLP.
He added that it would be technically difficult to cancel the deals with the shareholders who participated in the buyback, because the issue would have to be settled with each of them individually in court.
Norilsk Nickel said that it plans to appeal the court's decision, which has yet to go into effect.
The court ruling "won't have any significant impact on the group's liabilities or any financial results," it said in a statement.
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