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(Adds Nyrstar comment)
By Julia Payne
LONDON, Oct 12 (Reuters) - Minority shareholders in zinc producer Nyrstar are seeking 1.48 billion euros ($1.63 billion) in damages from global commodities trader Trafigura over the restructuring of the Belgian firm, the shareholders' lawyer said on Saturday.
Nyrstar was on the brink of bankruptcy before Trafigura stepped in. The Geneva-based trader has a 24.4% stake in the Belgium-listed firm.
The statement outlines for the first time the total damages sought by the minority shareholders and marks an escalation in the fight for Nyrstar after several months of legal action.
"We have publicly launched the suit and the formal filing will be put to the Brussels commercial court just after the shareholders general meeting on Nov. 5," said Laurent Arnauts of Watt Legal lawfirm, representing about 100 shareholders.
As part of the deal to save Nyrstar, lenders had to write off part of their debt or agree to extended repayment schemes while all the firm's operating assets were transferred into a new subsidiary called Newco 2 based in Britain, in which Trafigura holds a 98% stake.
The remaining shareholders were then left with a 2% stake in the operating assets held by Newco 2 through their firm called Nyrstar NV.
Nyrstar is one of the world's largest zinc smelting companies with plants across Northern Europe, the United States and Australia. It also has zinc mines in North America.
The shareholders allege that Nyrstar's board did not pursue profit, acting against its legal duties, and committed fraud.
"On the basis ... of fraudulent avoidance of the law provisions regarding liquidation of companies, which require a decision of the general meeting of shareholders," according to a statement from Watt Legal.
As part of the lawsuit, the shareholders will seek to nullify the decisions of Nyrstar's board that accepted the "lock-up agreement," or restructuring terms, in April.
A spokesman for Nyrstar said, “Nyrstar NV notes that it has not been served with any legal claim and considers the allegations made via the media...to be without basis. In the event that any such legal claim is made, Nyrstar will strongly defend itself.”
He added that without the recent restructuring, group wide insolvencies would have likely occurred and “recoveries for creditors would have receive significantly less and recoveries for shareholders would have been nil.”
As an alternative to cancelling the deal, the shareholders are seeking 980 million euros ($1.08 billion) in compensation from Trafigura.