http://www.smh.com.au/news/world/from-richest-man-to-russias-biggest-loser/2008/10/21/1224351253260.html
"Luke Harding in Moscow
October 22, 2008
FOR the handful of Moscow pensioners gathered beside Karl Marx's statue this week there was, at last, something to be cheerful about: what the Soviet Union was unable to achieve in 70 years - the overthrow of global capitalism - is now happening, including in Russia.
The most prominent victim is Oleg Deripaska, until recently Russia's richest man. In May his fortune, according to Forbes magazine, was $US28.6 billion. His empire included aluminium, construction, car parts, and a van factory in Birmingham, England.
In April Mr Deripaska was bullish. His metals firm, Rusal, could soon float in Hong Kong or London, he said.
Six months later, Mr Deripaska has hit the new economic reality with a crunch. Like many Russian oligarchs, he aggressively expanded his business by borrowing billions against his company's assets. Since May, these have shrunk. Russia's sharemarket has tanked, losing 71 per cent of its value.
Foreign investors have fled, spooked by the global credit crisis, the war in Georgia and the Kremlin's market interventions.
Earlier this month, Mr Deripaska was forced to sell major assets. On Monday the Financial Times reported he was trying to borrow $US2 billion ($2.88 billion), which he needs by the end of this month to repay part of a $US4.5 billion loan from Western banks that he used to buy 25 per cent of the world's biggest nickel miner. Suddenly, Russia's richest man is out of money.
It is, perhaps, too early to talk about the demise of Russia's oligarchs or the return of communism. But experts agree Russia's super-rich have taken an unprecedented hit. In May, Russia boasted 87 billionaires - second only to the US. At least half are likely to lose their billionaire status in 2009, says the editor of Forbes Russia, Maxim Kalushinky. "It's still unclear what's going to happen. But we are in a mess," he said.
Some of Russia's fun-loving elite are insisting all is well. Stands at next month's Moscow millionaires' fair, where you can buy a jet or space-age piano, are booked out. However, the financial news agency Bloomberg estimates Russia's top 25 individuals have collectively lost $US230 billion in the past five months, with Mr Deripaska dropping $US16 billion.
The caviar counters of Moscow are deserted and its notoriously snooty nightclubs have relaxed their vigorous system of "face control".
On Monday the Prime Minister, Vladimir Putin, declared the nation was well prepared for the financial crisis and would use its enormous foreign reserves, accumulated from oil and gas, to fund its continued development.
The Russian Government has offered $US50 billion in loans to help the oligarchs, but some analysts suggest that isn't enough money to go round.
Also on Monday Mr Deripaska's investment company Basic Element conceded times were tough but had no comment on rumours the oligarch had sacked his private staff to save roubles.
Guardian News & Media"
"Luke Harding in Moscow
October 22, 2008
FOR the handful of Moscow pensioners gathered beside Karl Marx's statue this week there was, at last, something to be cheerful about: what the Soviet Union was unable to achieve in 70 years - the overthrow of global capitalism - is now happening, including in Russia.
The most prominent victim is Oleg Deripaska, until recently Russia's richest man. In May his fortune, according to Forbes magazine, was $US28.6 billion. His empire included aluminium, construction, car parts, and a van factory in Birmingham, England.
In April Mr Deripaska was bullish. His metals firm, Rusal, could soon float in Hong Kong or London, he said.
Six months later, Mr Deripaska has hit the new economic reality with a crunch. Like many Russian oligarchs, he aggressively expanded his business by borrowing billions against his company's assets. Since May, these have shrunk. Russia's sharemarket has tanked, losing 71 per cent of its value.
Foreign investors have fled, spooked by the global credit crisis, the war in Georgia and the Kremlin's market interventions.
Earlier this month, Mr Deripaska was forced to sell major assets. On Monday the Financial Times reported he was trying to borrow $US2 billion ($2.88 billion), which he needs by the end of this month to repay part of a $US4.5 billion loan from Western banks that he used to buy 25 per cent of the world's biggest nickel miner. Suddenly, Russia's richest man is out of money.
It is, perhaps, too early to talk about the demise of Russia's oligarchs or the return of communism. But experts agree Russia's super-rich have taken an unprecedented hit. In May, Russia boasted 87 billionaires - second only to the US. At least half are likely to lose their billionaire status in 2009, says the editor of Forbes Russia, Maxim Kalushinky. "It's still unclear what's going to happen. But we are in a mess," he said.
Some of Russia's fun-loving elite are insisting all is well. Stands at next month's Moscow millionaires' fair, where you can buy a jet or space-age piano, are booked out. However, the financial news agency Bloomberg estimates Russia's top 25 individuals have collectively lost $US230 billion in the past five months, with Mr Deripaska dropping $US16 billion.
The caviar counters of Moscow are deserted and its notoriously snooty nightclubs have relaxed their vigorous system of "face control".
On Monday the Prime Minister, Vladimir Putin, declared the nation was well prepared for the financial crisis and would use its enormous foreign reserves, accumulated from oil and gas, to fund its continued development.
The Russian Government has offered $US50 billion in loans to help the oligarchs, but some analysts suggest that isn't enough money to go round.
Also on Monday Mr Deripaska's investment company Basic Element conceded times were tough but had no comment on rumours the oligarch had sacked his private staff to save roubles.
Guardian News & Media"
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