Huge Deripaska debt may be restructured

Agence France-Presse

Deripaska's holding company Basic Element owes Alfa Bank $800 million in debts, half of which have already matured, the bank's president Pyotr Aven told the Vedomosti newspaper.

The dispute between Deripaska and Alfa Bank - whose largest shareholder is fellow oligarch Mikhail Fridman - has caused concerns in the Kremlin that key companies owned by Deripaska could go bankrupt.

"Very unfortunately, Basic Element does not make a good example of cooperative behavior in its relations with banks," Aven said. "But we would be ready to restructure Basic Element's debts and even give new money if the company can firstly service the restructured debts and secondly supply additional collateral," he said.

However he also gave the company a stark warning about possible actions that Alfa Bank - Russia's biggest private bank - could take if Deripaska failed to satisfy its demands.

"We will ensure the fulfillment of obligations (by Basic Element) - freeze assets, accounts, possibly declare bankruptcy" of some companies. "The standard procedure," he said.

Deripaska's heavily indebted empire includes the carmaker GAZ and Rusal, the aluminum giant. Rusal last month won a two-month moratorium from international creditor banks to allow a debt restructuring.

Estimated to be Russia's richest man last year by Forbes magazine, Deripaska has seen his fortunes plunge amid a worldwide slump in metals, the heart of his empire.

"The authorities want to prevent the bankruptcy of... important firms. The president expressed concern about such firms at the meeting with Mikhail Fridman," Aven added, referring to talks last month that were seen as a Kremlin rebuke to Alfa Bank's line.