The Russian government has bailed out United Company RUSAL, which owns a 25 per cent stake in Norilsk Nickel, with a $4.5 billion state loan, it was confirmed yesterday (5th November).

The world's largest nickel producer has been under the spotlight of late due to management-related clashes between its Chairman Vladimir Potanin and UC RUSAL majority stakeholder Oleg Deripaska.

However, the latest move - which will see Norilsk appoint a government representative to its board and two state representatives to its management - could lead to a cooling of the row between the two billionaires.

Reuters quotes a statement from UC RUSAL, which is the world's largest aluminium producer, as reading: "In order to ensure the interests of the creditor, who is acting as the agent of the government of the Russian Federation in providing capital to Russian corporations, a representative of the Russian government will become part of an enlarged board of directors at Norilsk Nickel."

The one-year loan - which was issued by state bank VEB - sees UC RUSAL become one of the first companies to capitalise on the Kremlin's $50 billion rescue plan and will help it pay off debts relating to the acquisition of its stake in Norilsk in April.

The UC RUSAL statement also welcomed the news as it expected the changes to reduce Mr Potanin's influence over operations at Norilsk and to "encourage increased transparency".

An official from Interros, Mr Potanin's holding company, confirmed that the issue of appointing the government representative will be resolved next month.

"The decision on government representatives will be discussed at the EGM (extraordinary shareholder meeting) on 26th December," he told the Associated Press.



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UPDATE 2-Russian govt to appoint to Norilsk board (05/11/08)
http://www.reuters.com/article/bondsNews/idUSL557657820081105?sp=true

Deripaska's Rusal pays off $4.5 bn loan (05/11/08)
http://ap.google.com/article/ALeqM5g3SJUlHVOy7DOoj1Ft27NGMjnSFgD948U5L00