Embattled Russian magnate Oleg Deripaska – the former owner of Birmingham van maker LDV – was close to winning debt reprieves for several of his firms yesterday, as lenders agreed to restructure billions of dollars in debt accrued by his aluminium-to-autos empire.
Creditors of United Company RUSAL were due to meet in Paris to vote on a restructuring deal offering the world’s largest aluminium producer a maximum seven-year extension on repayment of its $7.3 billion debt to more than 70 international banks.
En+ Group, which manages the aluminium giant as well as assets in the oil sector, said it had secured a separate extension on repayment of $1 billion in debts until the end of 2013.
“We expect to be able to successfully complete the debt restructuring process and sign a new loan agreement within the next two months,” said En+ General Director Vladislav Solovyov.
Deripaska’s fortune, the biggest in Russia a year ago, has been shredded by the sharp decline in commodity prices that left the country’s billionaires badly exposed to loans taken out when markets peaked.
Foreign lenders, wary of Russia’s investment climate, are reluctant to inherit assets in lieu of repayment and view a successful conclusion to RUSAL’s restructuring talks as a gauge for Moscow’s ability to manage its $475 billion foreign debt.
Creditor bank sources said the proposed deal with UC RUSAL obliges the aluminium company to sell its one-quarter stake in mining giant Norilsk Nickel to cover debts to state banks, including $4.5 billion owed to VEB.
The sale will be triggered by a price formula in a deal that also requires UC RUSAL to pay a minimum $7.5 billion over four years to Russian and foreign creditors.
A sticking point in the restructuring process has been opposition by Alfa-Bank, controlled by billionaire Mikhail Fridman, to some of the plans. The bank brought a case against En+ Group to courts in Jersey and Cyprus.
But in a sign Alfa’s stance might be softening, a representative of the bank said it was prepared to restructure debts owed to it by another of Deripaska’s companies, car maker GAZ.
“Alfa-Bank is prepared to join the restructuring of GAZ Group’s debt,” said the representative, who asked for anonymity in line with the set company policy.
This would allow GAZ to strike a deal with all its creditors.
President Dmitry Medvedev warned Russian banks in March against destroying large, crisis-hit companies. In a speech in front of Deripaska and other business leaders, he called for an end to “corporate egoism”.
A source close to Alfa-Bank said GAZ owed the bank more than 200 million roubles ($6.5 million), a relatively small amount.