The world's largest producer of nickel and palladium, Russia's Norilsk Nickel ( NILSY , quote ), used repurchase agreements with banks to avoid the need to get the Kremlin's approval for its $4.5 billion share buyback.
The buyback of 7.71% of its shares - at $306 per Moscow share or $30.60 per ADR - boosts Norilsk's holding of its own stock to 16.94%.
This requires state approval since, according to Russian law, the miner is a "strategic subsoil user" and heavily regulated.
Since the shares are actually held by the mining company's subsidiary registered outside of Russia, NILSY buying its own shares theoretically represents a big enough "foreign" strategic investment to trigger red flags in the Kremlin.
To get around the rule, Norilsk signed repo agreements with international banks and financial institutions to acquire the title and voting rights to 7.4% of the shares, but not the underlying shares themselves.
This maneuver is the just the latest twist in the battle to control Norilsk between Russia's two biggest oligarchs: Vladimir Potanin and Oleg Deripaska.
Potanin, in conjunction with Norilsk's management, has for some time been trying to gain control of the company.
If this buyback is successful, in theory Potanin will have won. The company's 17% stake will be added to the 27% of NILSY Potanin's company Interros already controls, giving him a formidable bloc on the company's board.
Should Dutch trader Trafigura -- which owns another 8.1% of the company -- weigh in on Potanin's side, it will push him over the edge of simple majority status.
Deripaska, who runs the world's biggest aluminum producer, may not be defeated yet.
And Vladimir Putin himself has been known to take an interest in NILSY's boardroom moves.
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