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Interros co-owner Prokhorov quits nickel giant -1

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Russian billionaire Mikhail Prokhorov will sell his stake in Norilsk Nickel [RTS: GMKN] to business partner Vladimir Potanin and quit the board of directors of Interros, the metals giant's holding company said Wednesday.
(Recasts, adds details, analysts' views)

MOSCOW, January 31 (RIA Novosti) - Russian billionaire Mikhail Prokhorov will sell his stake in Norilsk Nickel [RTS: GMKN] to business partner Vladimir Potanin and quit the board of directors of Interros, the metals giant's holding company said Wednesday.

Prokhorov, ranked Russia's 10th richest man by Forbes, will sell his 27.4% stake in the world's largest nickel producer to Interros co-owner Potanin, and resign as Norilsk Nickel's director general. Analysts polled by RIA Novosti were generally upbeat about the move, and some put it down to a recent sex scandal involving Prokhorov.

Prokhorov will retain shares in other Interros assets - Polyus Zoloto gold producer, Rosbank, Prof-Media holding, Open Investment, and Russia's largest engineering company Power Machines - and manage them through a new investment vehicle, Interros said in a statement said.

Earlier in the month, the 41-year-old Russian billionaire hit the headlines after being arrested in a ski resort in the French Alps for questioning in a prostitution scandal involving minors. The oligarch was later released without charge.

Interros said the division of assets was designed to restructure holding's business. "Interros as a managing company will remain Potanin's property, and Prokhorov will quit its shareholding structure and set up his own company to manage his assets," the holding said.

The group also said Potanin would buy out Prokhorov's share in Norilsk Nickel, and replace him on the company's board. Interros also plans to consolidate its hydrogen and energy assets.

The holding's press service declined to disclose the details of the deal, saying Prokhorov's shares would be sold at market prices.

The announcement did not affect Norilsk Nickel's share price on bourses in Moscow, London, Frankfurt, Berlin and Stuttgart.

Experts are divided over the reasons for Prokhorov's decision to sell his Norilsk stake to Potanin. Vladimir Zhukov of Alfa-Bank said it was a well-considered move.

"The 'divorce' is caused by a strategic approach to the company's development," he said. "Perhaps Prokhorov wants to concentrate on other more lucrative areas, given that the [Interros] statement mentions energy and hydrogen assets."

Yelena Chernoletskaya, head of research at Moscow's European Trust Bank, said the news was hardly surprising, and had already been anticipated in business circles.

"The group has been actively reorganizing its assets and the business directions of Norilsk Nickel for two years," she said, adding that the spinoff of the Polyus Zoloto asset and an energy deal were obvious examples of the holding's restructuring policy.

The analyst said the holding would benefit from Potanin's control over Norilsk Nickel's shares, which would improve the company's efficiency.

"It is important not to interpret the asset division as 'a divorce' between Prokhorov and Potanin, or to look for a connection with any other events," she said, adding that the restructuring effort would barely affect the shares of Norilsk Nickel, which have been performing well on global markets.

Other analysts put the news down to a personal spat between Potanin and Prokhorov.

Oleg Dushin of the Zerih Capital Management said the incident in the French ski resort could have been one of the reasons, and the conflict between "the two strong people" had spilled over into business.

Denis Nushtayev of the Metropol investment group said Prokhorov's departure from the company had been expected, but came in a surprisingly aggressive form, which could have been provoked by the prostitution scandal in France, seen as undermining the reputation of the metals giant.

Dmitry Skvortsov of the Bank of Moscow said the decision was unexpected, and could have been dictated by unprecedentedly high nickel prices.

"The company will be unable to substantially raise production in the next few years; nickel prices are hitting historical highs and will most likely start to decline soon, so it this is a perfect moment for selling," Skvortsov said.

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