Norilsk Nickel makes clarifications with respect to Rusal’s announcement regarding Glass Lewis report
OJSC «MMC «Norilsk Nickel» (hereinafter – MMC Norilsk Nickel or Company) is informing that the Company has taken note of the report of Glass Lewis & Co. (Glass Lewis), an international consultancy company providing proxy advisory services to institutional shareholders, which was partially cited in the press release of UC Rusal Pls (Rusal) dated February 24, 2011. Glass Lewis supported the recommendation of the Board of the Company to re-elect the Board at EGM to be held on March 11, 2011. MMC Norilsk Nickel deems necessary to clarify certain points, as the information regarding the contents of Glass Lewis’ report provided in the press release of Rusal is biased.
Glass Lewis directly acknowledges that “prolonged infighting between the Company’s major shareholders serves as a detriment to the Company as well as to minority shareholders… Continued hostility between Rusal and Interros is likely to lead to further instability in the Company that may ultimately have an adverse effect on shareholder value”. The experts from Glass Lewis think that the major shareholders of MMC Norilsk Nickel should find a reasonable and mutually acceptable resolution of this conflict, which means in our opinion, that Rusal shall understand the adverse effect of its actions, review its approach towards Norilsk Nickel and express the willingness to negotiate with other shareholders of the Company.
The Glass Lewis report notes, that the Board of Directors of MMC Norilsk Nickel recommended the re-election of the Board in light of recent changes in the Company’s share ownership and the appearance of a new shareholder – Trafigura Beheer BV (Trafigura). Indeed, Glass Lewis remarks the presence of representatives of Trafigura in the list of nominees standing for election to the Board.
While analyzing the current composition of the Board and list of nominees, Glass Lewis clearly distinguishes the independent status of Bradford Mills and John Gerard Holden – two incumbent non-executive directors of the Company.
With respect to Trafigura deal, Glass Lewis’ experts question certain aspects of calculation of value destruction presented by Rusal. The report states that calculations are based on several critical assumptions that are unconfirmed and may not fairly represent the reality. Moreover, Rusal can’t provide any rationale to justify that the premium under the share buyback effected by the Company in December 2010 – February 2011 is “unjustified”.
Glass Lewis is unable to review or comment on the transaction of OGK-3 shares being swapped for the stake in InterRAO due to insufficiency of information, in their opinion. At the same time, the representatives of the Company several times unsuccessfully offered to Glass Lewis to arrange a meeting and/or conference call in order to exchange the information, including inter alia this transaction.
The management of the Company reiterates that it is intending to continue working in the interests of all groups of shareholders despite the pressure of certain shareholders exercised with an aspiration of achieving their separate egoistic goals.
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