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Rusal says it won't sell nickel stake

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Naomi Rovnick

Indebted Russian aluminium giant Rusal has insisted it will not sell its 25 per cent stake in domestic metals group Norilsk Nickel.

The nickel firm, which Rusal bought into in early 2008, has campaigned vehemently to end its relationship with oligarch Oleg Deripaska's aluminium producer.

Rival oligarch Vladimir Potanin, who also owns a quarter of Norilsk, told Russian media last month he had formed a consortium to buy Rusal's stake, valued at US$9.3 billion in Moscow, for US$9 billion.

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While Rusal has US$11.75 billion of loans, the aluminium producer's capital markets director, Oleg Mukhamedshin, said it would not exit Norilsk to reduce its debt mountain.

'Norilsk is a tremendous asset with a huge growth potential,' Mukhamedshin said. He made the comments as Rusal reported a 55 per cent decline in net profit for the three months to September.

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Earnings fell to US$29 million, from US$64 million this time last year, even though the aluminium price rose steadily. Rusal booked a US$388 million accounting loss on complex derivatives embedded in its electricity contracts, which pay out only if the aluminium price falls.

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