Deripaska Unloads Stake in Hochtief

BloombergDeripaska and Roman Abramovich attending a Kremlin meeting with then-President Vladimir Putin in March 2006.
Billionaire Oleg Deripaska has sold his 9.99 percent stake in German construction giant Hochtief, his company said, as the credit crunch batters Russia's richest man.

The sale marks the second major blow this month to Deripaska, who already handed a $1.4 billion stake in Canadian auto parts maker Magna to creditors as his indebted empire struggles to find money amid the liquidity squeeze.

United Company RusAl, of which Deripaska is majority owner, is alone estimated to be $14 billion in debt after it borrowed $4.5 billion from Western banks to fund the purchase of a one-quarter stake in Norilsk.

As stock prices around the world have tumbled dramatically in recent weeks, margin calls have led to forced selling of assets at steep discounts.

A spokesman for Basic Element, Deripaska's main investment vehicle, said the firm was still committed to its large minority stakes in Norilsk Nickel and Austrian construction firm Strabag.

In a terse statement, Basic Element, which was valued at $45 billion at the end of 2007, said the Hochtief stake had been sold.

In a separate statement, Germany's Commerzbank said it had increased its stake in Hochtief to 11.53 percent as of Oct. 6. Hochtief said Commerzbank and Allianz were the investors.

Hochtief spokeswoman Jutta Hobbiebrunken said Friday that the company would have liked to continue its relationship with Deripaska but that his departure would not greatly affect Hochtief's business in Russia.

"We have been making a yearly turnover of 150 million euros ($200 million) for years in Russia and our projects will continue without him," Hobbiebrunken said by telephone from Essen, Germany.

Among other projects, Hochtief is working on Sheremetyevo Airport and an eight-lane highway around St. Petersburg.

Hobbiebrunken also suggested that the company was disappointed over developments in Sochi, where construction firms are hoping for a bonanza in the run-up to the 2014 Winter Olympics.

"It would have been nice if Mr. Deripaska had opened that market for us, but especially in Sochi things did not work out as expected," she said.

Maximilian Bicker, a spokesman for Commerzbank, denied that a margin call had caused the sale. "The financing deal reached its contractual maturity this week and Commerzbank took the shares on a preplanned basis," Bicker said by telephone from Frankfurt.

Strabag, Deripaska's other major construction investment, this week hurriedly refinanced $683 million in loans that he had taken to finance a 25 percent stake.

In a separate development, Deripaska's RusAl is facing an investigation in the United States and Britain over a $57.5 million wire transfer last year from MDM Bank via an affiliate in Latvia to Barclays Bank in New York, The Wall Street Journal reported Friday, citing people familiar with the transaction. Some of the money ended up with Deripaska consultants in Washington that are under investigation for possible money laundering or other crimes, the newspaper said, citing law enforcement officials and lawyers.

RusAl on Friday referred questions to Basic Element, which declined to comment on the report. A Barclays representative in London did not immediately respond to a request for comment.

A spokeswoman for the Manhattan district attorney said she could neither confirm or deny the existence of an investigation, the Justice Department did not answer an e-mailed request for comment.

No one at GlobalOptions Management, the consultancy that the WSJ identified as advising Deripaska, replied to written questions.

Reuters, MT