UPDATE 1-Norilsk shareholder Interros opposes new board vote

By Aleksandras Budrys

MOSCOW, July 8 (Reuters) - Interros, owner of a quarter of shares Norilsk Nickel, said on Thursday it will not support another election for the Russian metals giant's board as called for by the owner of an equal stake, UC RUSAL.

In its latest spat with RUSAL, Interros also said on Thursday that the aluminium producer's Norilsk board members had voted in their own firm's interest at the expense of the nickel company.

RUSAL, the world's top aluminium producer, unhappy with the loss of a seat on the board of Norilsk, said on Wednesday it would ask for a new vote.

Interros -- the investment vehicle of Russian tycoon, Vladimir Potanin -- said it believed the voting took place in strict conformity with existing legislation and Norilsk's corporate rules.

The new board of Norilsk -- the world's biggest producer of nickel and palladium -- includes four representatives of Interros, three of RUSAL, three members of the management and three independent directors.

RUSAL, majority owned by Oleg Deripaska, formally requested that Norilsk provide the voting papers from the annual general meeting, saying it might file a lawsuit if violations are found.

Interros said RUSAL's representatives on the board had voted against approving Norilsk's budget for 2010 and had demanded a dividend which exceeded the company's net profit.

'It is evident that RUSAL is trying to solve its own debt problems at the expense of Norilsk Nickel,' Interros said.

In May the Norilsk board rejected a request from RUSAL, whose debt stands at $12.9 billion, to pay 110 percent of its profit or some $3 billion in a dividend for 2009 and instead approved a dividend of $1.325 billion.

Interros also said that RUSAL had demanded another election after the independent directors voted against the merger between RUSAL and Norilsk. One of the independent directors, Brad Mills, told Reuters he saw no reason for the merger plans long nurtured by RUSAL shareholders.

The conflict could support Norilsk shares, analysts said.

'We expect all parties to start building up their stakes ahead of the EGM, which could result in the purchase of shares on the open market, supporting the near-term share price,' UralSib bank said in a note.

Norilsk shares were up 0.51 percent at 4,810 roubles at 0752 GMT on Thursday, underperforming both the broader Russian market index and the Russian mining index.

(Reporting by Aleksandras Budrys; Editing by Hans Peters) Keywords: NORILSK RUSAL/INTERROS ([e-mail]; [phone]; Reuters Messaging: [e-mail]) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.