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Russian state-controlled bank OAO Sberbank (SBER.RS) is ready to extend a helping hand to billionaires fighting for control of the country's largest miner, OAO Norilsk Nickel (GMKN.RS), people familiar with the matter said.
The bank is close to signing loan agreements that would ease debt problems of both aluminum giant United Co. Rusal (0486.HK), in which Oleg Deripaska is the major shareholder and chief executive, and Interros Holding, controlled by Vladimir Potanin, the people said. Each company has an approximately one-quarter stake in Norilsk, the world's largest producer of nickel.
Rusal, which has a debt of about $12 billion, is close to signing a deal with the bank that will see the aluminum company refinancing its $4.5 billion debt to the state development bank Vnesheconombank, or VEB, which is due in the late fall, two people said The agreement in principle has been reached prior to Rusal's initial public offering of its shares on the Hong Kong Stock Exchange in January, and the final deal is expected shortly.
VEB provided the loan, to which Rusal has mortgaged its shares in Norilsk in late 2008, to refinance the aluminum company's debt to a pool of international banks. According to the people, the new agreement will also see Rusal's stake in Norilsk mortgaged, but its tenor would be extended till 2013.
Interros, which faces an approximately $1 billion debt repayment to another state-controlled bank VTB (VTBR.RS) later this year, is also close to getting a credit line of about $1.5 billion from Sberbank, according to other two people, familiar with the situation.
Interros was trying to get a syndicated loan from a pool of international banks, headed by Bank of America Merrill Lynch and Credit Suisse earlier this year. However, the talks didn't bear fruit as banks hesitated to provide funds during the markets' chaos in early summer, which was followed by Norilsk's annual general meeting and rancor among shareholders.
Interros is still in talks with other international banks, people said.
Rusal has voiced dissatisfaction with the outcome of Norilsk's annual meeting June 28, as well as with the company's strategy and management. At the meeting, Rusal's board representation fell to three people from four, and Chairman Alexander Voloshin, whom Rusal supported, was ousted. Rusal has repeatedly accused both Interros and Norilsk management of irregularities during the meeting, and called for replacement of the company's current CEO Vladimir Strzhalkovsky. Rusal has already complained about the situation to the country's financial markets watchdog and to the Russian president Dmitri Medvedev.
Both Interros and Norilsk management deny any wrongdoing.
-By Alexander Kolyandr, Dow Jones Newswires; email@example.com