The Kremlin's Bailout of Russian OligarchsSubmitted by visible51 on Tue, 01/26/2010 - 18:11
I thought Putin kicked out the Oligarchs ??
MOSCOW -- Swamped with debt, Oleg Deripaska seemed the most likely of Russia's tycoons to fall victim to the financial crisis a year ago. Today he is on his way to preserving most of his sprawling empire, thanks to bailouts from the Kremlin and breaks from foreign lenders.
A month ago, Mr. Deripaska closed a deal to delay repayment of $7.4 billion in foreign loans. This week, he kicks off marketing for an initial public offering of UC Rusal, the aluminum giant that is the core of his holdings.
One key party has already committed to buying shares: a state bank whose chairman is Vladimir Putin.
Mr. Deripaska's experience underscores the strangely symbiotic relationship between Russia's oligarchs and a leader, Prime Minister Putin, who once threatened to eliminate them "as a class." It also helps explain how the oil-fired Putin regime has survived a financial and economic crisis that once appeared to threaten its foundation.
When the crisis struck in 2008, Russia's business elite were gripped by fears the Kremlin would take advantage of the debt-burdened tycoons' straits to grab prime assets. The crisis was likely to result in "massive redistribution of assets," one tycoon said at the time. Instead, whereas Western nations' bailouts have sometimes wiped out shareholders, the Russian authorities have so far taken care to protect the interests of the billionaires who control much of industry.
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