Commodities

Nornickel to consider 9-mth dividend, looks to limit payments -co-owner

Credit: REUTERS/Sergei Karpukhin

Russia's Norilsk Nickel should keep its dividend payments for 2020 to a mininum level, co-owner and top shareholder Vladimir Potanin told Reuters.

MOSCOW, Oct 26 (Reuters) - Russia's Norilsk Nickel GMKN.MM should keep its dividend payments for 2020 to a mininum level, co-owner and top shareholder Vladimir Potanin told Reuters.

Potanin's Interros holding, aluminium producer Rusal 0486.HK and some other stakeholders have an agreement on dividend payouts which suggests that Nornickel pays them twice a year.

Nornickel board of directors will consider a nine-month dividend payment at its upcoming meeting, Potanin said.

Nornickel has been hit by the coronavirus pandemic, which has led some of its peers to reduce dividends, and by a fuel spill at an Arctic power plant in May for which Russia's environmental watchdog wants Nornickel to pay around $2 billion in damages.

The company cannot refuse to pay dividends due to the shareholder agreement but Interros considers it necessary to reduce the amount of dividends to a minimum amount "in this difficult year", Potanin said.

After the spill, Potanin, who owns a stake of 34.5%, proposed capping the 2020 dividend at $1 billion, while Rusal, which relies on dividends from its 27.8% stake in Nornickel, called for a management overhaul.

Russia's largest lender, state-controlled, Sberbank approved a record dividend payment of 422 billion roubles ($5.5 billion) recently.

"Nornickel cannot act this way today despite favourable market conditions," Potanin said.

Nornickel's net profit fell to $45 million in January-June as it set aside $2.1 billion for the environmental damage claim.

Interros understands, however, that Nornickel's dividend payments are crucial for the state budget via dividend tax payments and for employees, who own shares in the mining giant and see the dividends as guaranteed family income, Potanin said.

Nornickel has more than 100,000 individual shareholders, including most of its workers.

The state budget has received more than 100 billion roubles in dividend tax from Nornickel's shareholders over the last 5 years, he added.

($1 = 76.4250 roubles)

(Reporting by Polina Devitt and Anastasia Lyrchikova; editing by Jason Neely)

((Polina.Devitt@thomsonreuters.com))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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