NEWS & EVENTS: Breaking News
14.10.2008 10:51
Oct 14. Norilsk Nickel board member Mikhail Prokhorov forwarded a request on the basis of Article 68 of the Federal Law "On Joint Stock Companies" "seeking to call a board meeting to discuss the issue of canceling the metal major’s decision to buy back its common shares that was adopted by the Board of Directors on August 22, 2008". "Amid the crisis on the international and Russian financial markets I call upon Norilsk Nickel’s board members to cancel the decision according to which the metal producer is to buy back its common registered shares and that was taken at the initiative of the major shareholder on August 22, 2008" – said an open letter addressed to Norilsk Nickel board chairman Vladimir Potanin and posted on Prokhorov’s blog. "I regard the decision to buy back stocks for a total of USD 2 bn as untimely at the moment and capable of pushing the metal major into bankruptcy. If this decision is executed, the company’s aggregate debt will exceed USD 8 bn" – the letter said. According to Prokhorov, such actions pose the threat of bankruptcy to the once prosperous company "due to a sharp decline in prices for main products, a slide in the metal major’s capitalization, the acute lack of financial resources from Russian and foreign lending institutions, and also taking into account heavy internal problems (lower output) at the Norilsk division, operating losses suffered by LionOre, an inevitable rise in capital outlays (also owing to the insufficient funding of the capex program in recent years), the need to finance long-standing social programs and fulfill obligations to the state as regards the commissioning of new power generation facilities at OGK-3". At the same time, Prokhorov, who is also the owner of Onexim Group, fears that if the metal producer’s leverage tops USD 8 bn, "the company will be unable to execute its investment program geared towards revamping production facilities and, at the same time, will face serious problems in fulfilling its corporate obligations". According to Norilsk Nickel’s board member, the only explanation for such actions "is the aspiration of the majority shareholder that controls Norilsk Nickel to amend its financial standing at the expense of the company and strengthen control over the metal major’s equity capital". Prokhorov also pointed out that the decision to buy back stocks may be legally cancelled until October 29. "To this end, it is essential to have relevant decisions consistently taken by Norilsk Nickel’s executive board and board of directors" – the letter said.
| If you would like to share your opinion, you will need authorization! |