Sanctions End Deripaska's Hopes for Power at Russia's Top Miner

(Bloomberg) -- U.S. sanctions against Oleg Deripaska will likely end the billionaire’s ambitions for control of Russia’s largest mining company.

For years, Deripaska sought to have more sway at MMC Norilsk Nickel PJSC, with a fight against Vladimir Potanin recently spilling out into London courts. Now that Deripaska is facing some of the harshest U.S. sanctions, it will be impossible for him to complete a deal to buy more shares.

"Potanin may feel a bit easier now as Oleg Deripaska has other issues to be solved on the table," said Sergey Donskoy, an analyst at Societe Generale SA in Moscow.

U.S. sanctions prevent Deripaska from doing business in the Western financial system and would block financing needed to buy a stake offered by a fellow shareholder. Rusal owns a 28 percent stake in Norilsk Nickel and the dividends are an important cash source.

In March, a London judge gave the green light for Roman Abramovich to sell 2 percent of Norilsk Nickel to Deripaska, and another 2 percent to Potanin.

Potanin completed his side of the deal. Now that Deripaska is under U.S. sanctions, Abramovich isn’t allowed to sell him the shares, according to two people with knowledge of the matter, who asked not to be identified because the information isn’t public.

The sanctions also mean Potanin is prevented from buying Rusal’s stake in Norilsk Nickel, said the people. Additionally, Potanin is blocked from negotiating new terms of a shareholder accord or offering larger dividends to Rusal, they said, adding that the parties are not holding any talks. The Kremlin is evaluating measures to help Rusal, they said.

The press services for Rusal and Nornickel declined to comment when contacted by Bloomberg News.

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