Business, Energy or Environmental regulations or discussions

RusAl chairman wants to discuss price of Norilsk stake

MOSCOW, September 8 (RIA Novosti)

"I was authorized by RusAl's board of directors to examine proposals which reflect the fundamental price of RusAl's blocking stake in Norilsk Nickel," Vekselberg said.

RusAl, controlled by Russian billionaire Oleg Deripaska, and Interros, the investment arm of another Russian billionaire, Vladimir Potanin, which holds over 30 percent in Norilsk, have been locked in a struggle for control of Norilsk Nickel for more than a year. RusAl says the Norilsk board has become dominated by officials linked with Interros.

Norilsk management and Interros have repeatedly tried to buy RusAl's stake but the aluminum giant rejected proposals to sell its 25 percent for $12 billion last December, 20 percent for $12.8 billion this March and 15 percent for $8.75 billion this August.

"I think we will discuss the letter at a board meeting. The company is preparing no new offers now ... I will act in the interests of the company," Norilsk Board Chairman Andrei Bugrov told RIA Novosti.

A source close to Norilsk said late on Wednesday that the board of directors would discuss an offer to minority shareholders to buy back about 7.71 percent of shares for nearly $4.5 billion on September 13.

http://www.bne.eu/dispatch_text16523

Alfa Bank

UC Rusal's Board of Directors has voted to allow Chairman Viktor Vekselberg to study offers to sell Rusal's 25% stake in Norilsk Nickel as long as they reflect the fundamental value of the nickel producer.

We believe the news is NEUTRAL at this point, as both parties are unlikely to agree on the deal before the buyback offer to minorities is made. It is worth noting the following: Oleg Deripaska is still against of the sale of the Norilsk stake, and he has ultimate control over Rusal.

In its last offer to Rusal, Norilsk clearly indicated that it is not eager to buy Rusal's stake at this point - the offer was less attractive than the previous one in terms of both price and volume.

There is no point in buying Rusal's stake now, as after the buyback and cancellation of treasury shares, the premium for control of Rusal's stake in Norilsk will further deteriorate.

Rusal's understanding of Norilsk's fundamental fair value implies over a 100% premium to the market, a price which Norilsk is unlikely to pay in our view.

According to press reports citing unnamed sources, Norilsk's Board of Directors will consider an offer to buy back shares on September 13. According to these reports, Norilsk may buy $4.5bn worth of shares at $30.6/GDR.

According to our estimates, minorities will be able to sell ~12% of shares into the buyback if all besides Rusal and the treasury participate. If the alliance between Interros, Trafigura, and the management of treasury shares decides to increase its stake from 47% to 50%+ via a cancellation of shares after the buyback (which we consider a less likely scenario), minorities will be able to sell over ~21% of shares presented.

Barry Ehrlich


Moscow Arbitration Court rejects Auchan's counter-claim to FAS; NEGATIVE for retailers

http://www.bne.eu/dispatch_text16523

Alfa Bank

According to RBC Daily, the Moscow Arbitration Court rejected Auchan's counter-claim against the Federal Antimonopoly Service. The antimonopoly watchdog previously claimed the retailer was in the violation of retail law. The court took FAS' side and decided that retailers cannot abuse their influence over suppliers, including using unified agreements, taking upfront bonuses for signing supply contracts with chains, demanding payments for additional services such as advertising and promotions, and discriminating against suppliers.

In our view, that creates a precedent for other retailers and signals that the Russian government is supporting suppliers in their confrontation with retailers.

Alexandra Melnikova

Ozon.ru wins biggest Russian e-commerce investment

http://www.reuters.com/article/2011/09/08/ozonru-funding-idUSLDE7860H620110908
4:00am EDT

LONDON, Sept 8 (Reuters) - Russia's leading online retailer Ozon.ru has secured funding of $100 million, the biggest private investment to date in Russia's e-commerce market, from a consortium including Japanese online retailer Rakuten .

Often described as the Amazon of Russia, which has an underdeveloped but high-potential Internet market, Ozon.ru made sales of $137 million last year and plans to use the funds to increase its distribution and widen its product range.

Investors are taking an increasing interest in the Russian Internet market, helped by high-profile public listings like those of Yandex , Russia's largest search engine company, and email service Mail.ru (MAILRq.L: Quote, Profile, Research, Stock Buzz).

"From an investor perspective, there's definitely a change," Ozon.ru Chief Executive Maelle Gavet told Reuters by telephone. "The market is becoming more known, less scary."

The new funding round is being led by ru-Net, and includes Swiss equity fund Alpha Associates -- a new investor in Russia -- venture capital firm Index Ventures, and controlling shareholder Baring Vostok Private Equity Fund.

With about 60 million Internet users, Russia is Europe's second-biggest Internet market after Germany and still has just 43 percent penetration.

But global Internet giants Google , Facebook and eBay have found the Russian market tough because of issues of language, business culture and infrastructure.

According to a November 2010 study by Google Russia and Citibank, Russians were expected to spend 600 billion roubles ($20 billion) on online purchases using bank cards in 2010, rising to 800 billion roubles in 2012.

Because relatively few Russians have credit cards, Ozon.ru accepts cash on delivery at a network of collection kiosks. It has also built up its own courier service to bypass the shortcomings of the Russian postal service.

Gavet said Russians were finally coming around to the idea of online shopping.

"From the consumer perspective, what happened in the U.S. 10 years ago and Europe five years ago is now happening in Russia. People are beginning to understand that e-commerce is easy and safe," she said. (Editing by Will Waterman) ($1=29.50 Rouble)

press release

Sept. 8, 2011, 12:00 a.m. EDT

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