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Russian businessman Oleg Deripaska visits the GAZ car factory in Nizhny NovgorodDENIS SINYAKOV

Oleg Deripaska has gone from dead oligarch walking to government-backed deal maker.

A year ago, the financial crisis had shrunk the estimated wealth of Mr. Deripaska, Russia's richest man before the crunch, to $3.5-billion (U.S.) from $28-billion. A margin call had deprived him of his $1.5-billion stake in Canadian auto parts marker Magna International. His GAZ auto company had all but stopped making cars. His showpiece investment, UC Rusal, the world's top aluminum producer, was so overwhelmed by debt that it essentially became a ward of the state.

Worse, Mr. Deripaska appeared to have lost the Kremlin's trust. When he left workers without pay at a cement factory he owns in a small town near St. Petersburg, a sympathetic Vladimir Putin, Russia's Prime Minister, showed up with the oligarch in tow. Mr. Putin made sure the TV cameras were there too. "I wanted the authors of what happened here to see it with their own eyes," the Prime Minister said. "You have made thousands of residents hostage to your ambition, your lack of professionalism and perhaps your greed."

Holding out a pen, Mr. Putin ordered the oligarch to sign an agreement to restart the factory. He signed. "My pen. Give it back," Mr. Putin demanded.

Was Mr. Deripaska's public humiliation staged? Based on his tentative comeback since then, it appears Mr. Putin's chilly treatment of the man once known as "the Kremlin's favourite oligarch" was as much political theatre as genuine putdown.

The evidence: About the same time, state-owned Vnesheconombank (VEB), where Mr. Putin is chairman of the advisory board, agreed to extend an emergency, $4.5-billion loan to Rusal for a year while a debt restructuring plan was put in place.

Rusal, the holding that can make or break Mr. Deripaska's Basic Element industrial and financial empire, was on the receiving end of another government favour as 2009 drew to a close. VEB agreed to take a 3-per-cent stake in Rusal when Rusal completes its initial public offering on the Hong Kong Stock Exchange, with a secondary listing in Paris.

Another state-owned bank, Sberbank, said it would buy into Rusal, too. Sberbank is not a disinterested party; it agreed to refinance the $4.5-billion emergency loan provided by VEB. Sberbank and VEB together could well emerge as the biggest sponsors of the IPO, which will see 10 per cent of the shares sold to investors, valuing Rusal at $20-billion.

Rusal gained listing approval from the Securities and Futures Commission on Dec. 21 on the condition that the IPO would not have a retail tranche, in a bid to "protect" Hong Kong's retail investors from the complexities of the deal. The exchange's message: Rusal equity is too risky for all but the most sophisticated, and wealthy, investors.

On Thursday, Dow Jones reported that U.S. asset management firm BlackRock Inc. was also planning to buy shares in Rusal during the planned IPO, which is likely to happen late next month.

A source close to Mr. Deripaska said Mr. Deripaska and his private holding companies will hold 48 per cent of the stock exchange-listed Rusal, down from the 57 per cent he currently owns. Whether 48 per cent constitutes control is an open question. In November, a VEB board member and Russian finance minister Aleksei Kudrin told reporters that, "As a result of the IPO, Deripaska will hold less than 50 per cent. After VEB buys a stake, the government and Deripaska will control the company."

The government backing probably spared Mr. Deripaska's empire from implosion. He wasn't alone. Several Russian corporate giants received state aid, including Lukoil; Norilsk Nickel, which is 25 per cent owned by Rusal; and steel maker Evraz.

The government feared that the companies would be seized by foreign creditors unless they lent a helping hand. Chris Weafer, the chief strategist for Moscow's Uralsib Capital, said Russia's non-financial companies have $723-billion of debt, of which $293-billion is owed to foreign banks. "Many of those companies had planned to issue equity to cut that debt in 2008-09, but were unable to do so," he said.

So the state came to the rescue. Certainly Rusal and its vast aluminum operations would be considered a strategic Russian asset, along with oil, gold and hydropower.

It's too early to say whether Mr. Deripaska will be able to restore Basic Element's former glory. The Rusal IPO has to succeed. Creditors who agreed to restructure $17-billion of Rusal debt have to be repaid. A nasty lawsuit in England with Mr. Deripaska's former colleague, Mikhail Chernoy (who claims he owns 13 per cent of Rusal), threatens to mess up the ownership structure. And the metals market has to get stronger - Rusal lost $784-million in the first half of 2009.

Still, the worst seems over for Mr. Deripaska. Other oligarchs are showing signs of life, too.

Mikhail Prokhorov, who displaced Mr. Deripaska as Russia's richest man because he managed to lose less money than many other oligarchs during the financial crisis, is joining forces with three other oligarchs to launch a fund to restructure Russian banks and other companies. His fund partners are Polyus Gold co-owner Suleiman Kerimov; Alexander Abramov, co-owner of the Evraz steel-making group; and Viktor Vekselberg, an oil-and-aluminum billionaire.

Just before Christmas, Mr. Prokhorov's MFK bank said "active work on solving Russian firms' debts and offering help to the state to restructure the national banking system have a special place in our new strategy."

While Mr. Deripaska is still trying to repair his Russian business holdings, Mr. Prokhorov has mustered the confidence to play the deal-making game on both sides of the Atlantic. The basketball-loving billionaire is on the verge of buying the struggling New Jersey Nets team. If the purchase is approved, he would be the NBA's first non-North American team owner. At least one Russian oligarch is having fun.

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