More bad news for the Russian - and global? - economy. Rumours are starting to swirl that a few oligarchs can’t finance their debts.
Already Basic Element, Oleg Deripaska’s investment vehicle, has been forced to transfer it’s 20% stake in Canadian car parts manufacturer Magna to repay a debt to French bank BNP Paribas. Apparently the bank were pressuring Deripaska to repay a loan secured on the Magna shares, but Deripaska didn’t have the cash. The stake was worth $1.5bn at its peak, but I’d imagine a lot less when it was transferred to BNP Paribas.
The Herald Tribune has the best quote of the day:
In recent years, “Russians discovered leverage and went hog wild,” Gandz said.
“A lot of these investments were built on a pyramid of debt. If somebody starts calling in shares, the whole pyramid starts getting shaky.”
Interestingly Red Exile (from whom I first heard of this story) seems to be thinking along the same lines - he’s just announced on Twitter that he’s started making maximum cash withdrawals from his Russian bank accounts.
- What next?
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