History
Mastering Norilsk ore deposits The presence of copper-nickel ore deposits in the Taimyr Peninsula has been already known since the 17th century, but serious researches of their industrial potential began only in the 1920s. On June 23, 1935 the Council of Peoples’ Commissars of the USSR passed a resolution “On Building the Norilsk Combine” and passed the project to execute over to the Commissariat of Home Affairs (NKVD), i.e. the Soviet security services. That was the beginning of the country’s biggest mining and metallurgical complex, nearly 2000 kilometers to the north of Krasnoyarsk on the Taimyr Peninsula.
On March 10, 1939 the first copper-nickel matte was produced in Norilsk. By June 16, the plant produced the first high grade nis matte. Until the great Patriotic War the Norilsk combine comprised a small metallurgical works, an oxygen, and a coke production units, a mechanical repair workshop, a temporary power station, three open-cast coal pits, three mines and others under construction, sandstone and limestone quarries, a railway, an airport, and a port at Dudinka on the Yenisey river. By 1953 the combine was producing 35% of the Soviet Union’s total nickel output, 12% of its copper, 30% of its cobalt and 90% of its platinum group metals. Development of copper-nickel industry on the Kola Peninsula Creation of the concern Norilsk Nickel RAO Norilsk Nickel was born In 1994, shares in the company were distributed, in accordance with privatization plans, in part to the workforce and in part for sale by voucher auctions. More than 250,000 people took shares in the company. The control packet of shares (38% of the shares or 51% of the voting shares) was retained as the state property, and in November 1995 was put forward at a mortgaging auction, as a result of which Uneximbank became the nominal holder of the control packet of shares in the RAO Norilsk Nickel. On August, 5 1997, a commercial investment competition was held for the controlling share (38%); it was acquired by the investment company Swift (which represented the Uneximbank’s interests) for over US$270 million, i.e. the payment was 80% higher than the starting price. Besides, under the terms announced, Swift transferred to RAO Norilsk Nickel’s accounts US$300 million for the development of Pelyatka condensed gas field near Norilsk, and RUR400 billion to maintain the social and civic infrastructure in the Norilsk industrial region (which has 300,000 inhabitants) and to pay off debts outstanding to the state Pension Fund from RAO Norilsk Nickel. Restructuring of RAO Norilsk Nickel Re-structuring is typical for not only foreign firms, but for the national companies as well – such were, for example, Yukos, Surgutneftegaz, Sibneft, and other. In 2000, re-structuring affected Norilsk Nickel, too. It is aimed at improving the performance and investment appeal of the Norilsk Nickel group that would answer the interests of all its shareholders, and is designed:
The transfer of the capitalization center from the RAO Norilsk Nickel to the Norilsk Mining Company (in February, 2001 it was named the Mining and Metallurgical Company Norilsk Nickel) was realized through additional share issue by the Norilsk Mining Company. The shares were placed through closed subscription among the shareholders of RAO and paid for by RAO shares. By the end of 2001, 96.9% of RAO Norilsk Nickel shares were swapped for MMC Norilsk Nickel shares. First Level ADR representing 15% of RAO Norilsk Nickel shares were issued and then re-registered automatically in the course of restructuring on MMC Norilsk Nickel shares. In 2004 an authorization was granted allowing circulation of up to 40% of MMC Norilsk Nickel shares abroad. The next phase of restructuring involved elimination of so-called cross ownership. A fraction of MMC Norilsk Nickel charter capital (17.62%) was controlled by RAO Norilsk Nickel, and the Board of Directors of MMC Norilsk Nickel suggested that the shareholders vote for the decrease in MMC Norilsk Nickel charter capital through the buy-back and retirement of 38,761,525 shares. At the EGM of MMC Norilsk Nickel on December 24, 2001 the shareholders approved amendments to the Company’s Charter, which made possible the launch of procedures aimed at the elimination of cross ownership. At the next EGM on March 29, 2002, the decrease in MMC Norilsk Nickel charter capital through the buy-back of some circulating stock was approved. As at July 1, 2006 OJSC MMC Norilsk Nickel held more than 95% of total RAO Norilsk Nickel share stock. Pursuant to the legislation in force, an entity owning more than 95% of total outstanding shares in an open joint-stock company at July 1, 2006, is entitled to request other shareholders to tender their securities. The relevant buy-back notice was duly sent to the shareholders of MMC Norilsk Nickel, and the Company’s interest in OJSC RAO Norilsk Nickel after the buy-back reached 99.999%. |
No company would remain unchanged for long. Business environment, market conditions, and legislation undergo various changes; there are variations in companies going on: production potential would be extended, new products would be developed, and companies would acquire new divisions and affiliated firms. Outside changes would force companies to make changes inside. In the modern market, corporations and companies do conduct structural transformations once in a 7- to 10-year period of time.
