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. Last Updated: 07/27/2016

Deripaska Eyes Moskva-City Control

Itar-TassA view of the Moskva-City project currently under construction. Onexim denies it wants to sell its stake in the project.
Oleg Deripaska is looking to gain control over the company operating the $10 billion Moskva-City development, a spokesman for Deripaska's Basic Element holding group said Wednesday.

The move could mean buying the 47 percent stake in the firm currently held by former Norilsk Nickel CEO Mikhail Prokhorov.

"We are interested, but we cannot say that the agreement will take place in the immediate future," Basic Element spokesman Sergei Rybak said, without specifying where financing for the deal would come from.

"Naturally we might have some conversations with the other major shareholder," Rybak said.

In June, Basic Element bought up Guta Group's 38 percent stake in City, the firm overseeing Moskva-City's infrastructure and management, in a deal estimated to be worth around $80 million.

Now Deripaska appears to be considering completing his aim to take over the whole company.

Alexei Ryabinkin, a spokesman for Prokhorov's Onexim Group, denied that the company is looking to sell its stake in City, however. "We will not sell and that also means that no talks are going on," Ryabinkin said.

City is responsible for developing the infrastructure, including gas, electricity and roads, for the 60-hectare Moskva-City.

Moscow city government backed Basic Element's purchase of Guta's shares in the hope of seeing a strong stakeholder take over the company, Vedomosti reported.

If Derispaska does buy out Prokhorov's stake it would give him an 85 percent stake in the company.

The remaining shares are held by some 8,600 independent minority holders, Vedomosti reported.

Reports of Deripaska looking to expand his holding in Moskva-City did not surprise analysts.

"Increasing the share seems like a logical step -- a development of this caliber requires a unified approach and strategy," said Andrei Postnikov, head of tenant representation at Jones Lang LaSalle Russia & CIS. "As the Moskva-City construction is moving forward confidently, City's significance and capitalization will be growing as well, possibly making its shares a successful mid-to-long-term investment."

Many of the city's major property developers, including Inteko, ST Development, Capital Group and Enka, are working on individual projects on the Moskva-City development.

Moskva-City is being modeled along the lines of Paris' La Defense district and will contain a clutch of Europe's tallest skyscrapers.

Any move by Deripaska to enlarge his stake in Moskva-City would represent the latest stage in a spending spree by the billionaire.

Over the last year, Derispaska has paid $1.6 billion for 30 percent of Strabag, Austria's largest construction firm, and increased his stake in Hochtief, Germany's largest building company, to 9.99 percent in a deal estimated by Vedomosti to have been worth about $520 million.

Beyond the real estate sector, Russian Machines, controlled by Deripaska, has also reached a deal to invest $1.54 billion in Canada's largest auto-parts manufacturer, Magna International.

Earlier this month, Deripaska also reportedly launched a bid to buy an 82 percent stake in Power Machines, the country's largest turbine maker.