Russia's Alfa Bank asks $400 million from state
A bank belonging to one of Russia's biggest tycoons said today it is seeking $400 million in government loans to stave off foreign creditors.
By PTI |
MOSCOW: A bank belonging to one of Russia's biggest tycoons said today it is seeking $400 million in government loans to stave off foreign creditors.
The move underlines the squeeze put on Moscow's over-leveraged moguls by the financial crisis and the strings the Kremlin can put on bailing them out.
The cash government funds being passed on by state-owned VEB bank would allow Alfa Bank, controlled by Mikhail Fridman, to avoid having to give up a 44 per cent stake in major Russian mobile phone company VimpelCom, which it had pledged to a group of foreign banks led by Deutsche Bank as collateral for a $2 billion loan.
Alfa Bank CEO Pyotr Aven told reporters today the bank has applied for $400 million from VEB but refused to provide further details.
But Russian newspapers reported that the VimpelCom stake would now be put up as collateral to VEB. "If the problems continue and for some reason Alfa is unable to pay back the loan, the collateral has nowhere to go but back to the state," said James Fenkner, director of Red Star Asset Management.
Russia's wealthiest businessmen are facing a shakeout after many of them borrowed heavily in recent years, often using their firms' shares as collateral. When Russian stocks plunged over the past few weeks, their creditors began demanding that they put up more collateral or risk losing their shares.
The move underlines the squeeze put on Moscow's over-leveraged moguls by the financial crisis and the strings the Kremlin can put on bailing them out.
The cash government funds being passed on by state-owned VEB bank would allow Alfa Bank, controlled by Mikhail Fridman, to avoid having to give up a 44 per cent stake in major Russian mobile phone company VimpelCom, which it had pledged to a group of foreign banks led by Deutsche Bank as collateral for a $2 billion loan.
Alfa Bank CEO Pyotr Aven told reporters today the bank has applied for $400 million from VEB but refused to provide further details.
But Russian newspapers reported that the VimpelCom stake would now be put up as collateral to VEB. "If the problems continue and for some reason Alfa is unable to pay back the loan, the collateral has nowhere to go but back to the state," said James Fenkner, director of Red Star Asset Management.
Russia's wealthiest businessmen are facing a shakeout after many of them borrowed heavily in recent years, often using their firms' shares as collateral. When Russian stocks plunged over the past few weeks, their creditors began demanding that they put up more collateral or risk losing their shares.
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