Russia's Nornickel board recommends dividend, approves stock split

MOSCOW, Nov 3 (Reuters) - Russian mining giant Norilsk Nickel (GMKN.MM) on Friday said its board had recommended a nine-month dividend of 915.33 roubles ($9.87) per share and approved a stock split to try and increase the investment case for its shares and reduce their volatility.

The world's largest palladium producer and a major producer of high-grade nickel, Nornickel this year failed to pay dividends on its 2022 results for the first time in 14 years, citing "negative geopolitics".

Nornickel's board recommended a stock split of each share into 100, the company said.

Chief Financial Officer and Senior Vice-President Sergey Malyshev said management had initiated the stock split to increase the attractiveness of investing in Nornickel's shares.

"Currently, the price of one Nornickel share exceeds the average price of major blue chips by several dozen times, which makes it difficult for a significant number of retail investors to buy them," Malyshev said.

Nornickel's Moscow-listed shares jumped to a more than 17-month high on the announcement. By 0931 GMT they were trading 0.2% higher on the day, slightly outperforming the wider index.

The split would lead to increased liquidity and reduced volatility, Malyshev said. The split will be carried out automatically and take several months.

The split will not affect dividends, the record date for which is Dec. 26.

The dividend payout will amount to about 140 billion roubles, according to Reuters calculations. It paid 411.1 billion roubles in dividends on its 2021 results.

SENSITIVE TOPIC

CEO Vladimir Potanin has said that sanctions have constrained Nornickel's development, though Western governments have refrained from targeting Nornickel directly, mindful of the disruption to aluminium markets after Potanin's rival Oleg Deripaska and his Rusal group were sanctioned in 2018.

Potanin is the Nornickel's largest shareholder with a 37% stake held through his Interros holding company. Aluminium producer Rusal (RUAL.MM) is the second-largest shareholder with a 26.4% stake. Former Chelsea Football Club owner Roman Abramovich has a 4% stake.

Nornickel dividends are a sensitive subject. Disagreements over them have been the main reason for on-and-off rows between its powerful rival shareholders for years.

The expiration of a decade-old shareholder agreement protecting Nornickel's dividend payouts at the end of 2022 left the company's future dividend strategy hanging in the balance. A dispute over the 2012 agreement led Rusal to file a lawsuit against Potanin in London in October 2022.

($1 = 92.7125 roubles)

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