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. Last Updated: 07/27/2016

Lenders Not Eager For BasEl Stock

Oleg Deripaska's Basic Element investment company said Wednesday that its creditors are not interested in converting debt into shares and that loan-restructuring talks need to be completed by the fall.

The company, whose holdings include 54 percent of aluminum producer United Company RusAl, offered banks shares of some industrial assets and does not rule out ceding stakes to reduce borrowings, deputy CEO Olga Zinovyeva said. Companies fully or part-owned by Basic Element have total debts of more than $20 billion, she said.

"In some cases, we're in talks for banks to take a stake in our business, but they don't want to," said Zinovyeva, who started in her role earlier this month. "Not every creditor is ready to invest billions in new technology and development."

Russian corporate borrowing from foreign lenders was triple that of Indian, Chinese and Brazilian rivals combined by the end of last year. The collapse in commodities, stocks and the ruble has forced Deripaska and other tycoons to renegotiate debt, slash jobs and cancel investment plans.

RusAl and GAZ Group, the country's second-largest automaker, are among Basic Element companies talking with banks to change credit terms after the global economic crisis sapped demand for metal, cars and property. RusAl has borrowed more than any other privately owned Russian company.

The aluminum company has until early May to renegotiate $7.4 billion owed to more than 70 foreign banks including ABN Amro Holding, BNP Paribas and Sumitomo Mitsui Financial Group. RusAl is seeking to extend its repayments to five to 10 years and link them to the aluminum price in London.

Basic Element companies paid more than $4 billion in interest on loans over the last six years and made $2 billion in repayments in 2008, Zinovyeva said. Basic Element itself has almost no debt, she said.