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Paul Holmes
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Joined: 12 Apr 2005
Posts: 969
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 Posted: Fri Oct 03, 2008 6:37 pm Post subject: Oligrachs - for Ender/ Arina |
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Oligrachs, most were/are highly leveraged in banking system, now some loans are getting called in. Who ever loaned Oleg this money is going to take a huge bath. It is not a fact the Russian economy is not strong and has resources, but over zealous and greed of the oligarch to earn filthy rich wealth might endanger the Russian economy more so that any other.
Wall Street was greedy, but the Oligarchs were much worse and their mentality has effected the Russian stock markets and real estate market.
Much as Wall Street needs rerform, but even more so is the Russian Financial centers. Putin has to stop blaming the west for the weakness of the Russian Financial system, and push reforms on the Oligarchs whether they were friend or foe.
| Quote: | Deripaska dumps Magna stake
JOHN PARTRIDGE
Globe and Mail Update
October 3, 2008 at 9:48 AM EDT
Auto parts magnate Frank Stronach's Russian romance appears to have hit a major pothole, opened up by the global financial crisis.
Russian billionaire Oleg Deripaska, who bought a 20 per cent stake in Mr. Stonach's Magna International Inc. in a controversial $1.54-billion (U.S.) deal that closed 13 months ago, disclosed Friday that he has been forced to relinquish the stake to creditors that helped him finance the purchase.
At Thursday's closing price of $45.59 on the New York Stock Exchange, his 20 million Magna shares were worth $911.8-million, suggesting he is taking a loss of almost $630-million on the sale.
Investors did not welcome the news. The shares fell $6.88 or 15 per cent to $38.71 in early trading Friday.
Analyst Michael Willemse at CIBC World Markets in Toronto called Mr. Deripaska's departure “disappointing,” adding that it is not yet clear how the Russian's creditors will dispose of the shares.
The tycoon's Basic Element investment company did not name the creditors in a statement Friday, although documents filed with securities regulators at the time of the deal identified French bank BNP Paribas as the key lender.
Mr. Deripaska, whom Forbes magazine pegged as Russia's richest man last year, held his Magna stake through his Russian Machines company and it was among his biggest overseas investments. Russian Machines, in turn, owns Gaz Group, Russia's second largest auto-maker.
Mr. Deripaska was counting on Magna's support to help modernize the antiquated auto industry in Russia, which is emerging as Europe's largest market.
Basic Element said it had decided to “terminate the participation of Russian Machines as a shareholder in Magna International due to the current global financial crisis,” Reuters reported.
However, it also said it would continue to co-operate with Magna to develop a Russian auto parts business.
Magna, based in Aurora, Ont., acknowledged the developments Friday.
“Our strategic alliance with Russian Machines has assisted us in accelerating our growth in the Russian market,” Magna co-chief executive office Siegfried Wolf said in a news release. “We have a good working relationship with Oleg Deripaska and the Basic Element group, including Russian Machines and its controlled subsidiary, Gaz Group. . .
“We believe that the Russian market still holds significant opportunities for us and intend to continue to pursue joint opportunities with Russian Machines and Gaz, as well as other opportunities to advance our position in Russia.”
Russia is one of the fastest-growing car markets. Russian media have reported Magna plans to build a $500-million plant in Russia to assemble around 150,000 Chrysler vehicles a year.
Mr. Stronach's decision to sell a large chunk of his company to the Russian oligarch raised the hackles of some minority shareholders because the deal gave Mr. Deripaska control of six of the 14 seats on Magna's board of directors, even though he bought only one fifth of the equity.
One of those shareholders, the Ontario Teachers Pension Plan Board also complained that the deal contained little in the way of compensation for existing shareholders, except for Mr. Stronach.
Mr. Deripaska had close ties to then Russian president Vladimir Putin, and Magna pitched this as a guarantee of access to the Russian car market.
- With files from Reuters |
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Ender
WayToRussified
Joined: 23 Aug 2006
Posts: 302
Location: Ural mountains
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Paul Holmes
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Joined: 12 Apr 2005
Posts: 969
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| Posted: Fri Oct 03, 2008 7:52 pm Post subject: |
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Amusing.
Putin needs better and more reliable friends.
It is pisses me off that these turkeys who thought could fly like an eagle and tell everyone they are eagles, but after a couple strokes of flight, people realize that they are turkeys. Now their stupidity will push Russia into an economic crisis.
Please someone give Putin a book of birds so he knows what a Turkey and an eagle looks like. |
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Paul Holmes
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Joined: 12 Apr 2005
Posts: 969
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| Posted: Fri Oct 03, 2008 7:56 pm Post subject: |
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Russian shares plunge, regulators halt trading
The Associated Press
October 3, 2008 at 12:37 PM EDT
MOSCOW — Russian regulators shut down one of the country's leading stock exchanges three times Friday to stem rapid declines in shares after investors took fright at growing concerns over the global economy.
After shares plunged in early morning trading, the federal regulator ordered the suspension of trading on the RTS, the country's benchmark index. The regulators have used similar moves to stem rapid share declines in recent weeks — usually to positive effect.
Stocks had opened lower on Friday morning in Russia, after a torrid trading session Thursday in the United States amid fears over the success of a federal bailout plan to stave off a recession. U.S. stocks plunged on the back of disappointing economic data, including signs of rising unemployment. Oil prices dropped overnight to below $94 (U.S.) a barrel.
By the close of trading, the RTS had shed 7 per cent to 1070.9 points. It was closed down twice in the afternoon and then shut early for the weekend. The MICEX exchange — where most of Russia's trading takes place — plunged by 5.3 per cent to 924.6 points, paring back steeper losses mid-afternoon.
Last month, Wall Street turmoil and sliding oil prices contributed to Russia's worst stock market collapse since 1998, triggering a domestic crisis of confidence and a shortage of liquidity, or ready cash for operations. Since its May peak, the RTS has lost 57 per cent of its value.
State-controlled oil major OAO Rosneft lost 6.6 per cent on MICEX and gas export monopoly OAO Gazprom shed 5.8 per cent, but mining company MMC Norilsk Nickel was the biggest blue-chip loser, shedding 18.2 per cent.
Earlier in the day, Oleg Deripaska's Basic Element holding — which owns a 25 per cent stake in Norilsk through aluminum giant UC Rusal — said it had been forced to divest a 20 per cent stake in Canada's Magna International Inc., an auto components maker, to creditors that helped finance the $1.5-billion deal last year. The divestment raises questions about the financial stability of the holding.
“This does provide a bit of solid evidence that there is a problem. And people are worried that their worst case fears might be realized,” said Chris Weafer, chief strategist at UralSib, referring to the potential for Russian companies to default on their debts. “And that's done a lot of damage to confidence.”
Russian corporations are estimated to have $45-billion in debt due to be repaid by the end of this year at a time when refinancing debt has become much more expensive. The government earlier this week pledged a further $50-billion of refinancing money to be made available via state-owned Vnesheconombank, but analysts say it may not extend to companies deemed less critical or strategic by the state.
Analysts said trading volumes were low as investors — many of them sitting on cash — wait for the markets to turn.
“People don't want to do anything, because they don't know what's going to happen next,” said Mr. Weafer. “If that happens long enough, then the oil price won't matter, because the economy will stop anyway.” |
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Paul Holmes
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Joined: 12 Apr 2005
Posts: 969
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| Posted: Fri Oct 03, 2008 8:11 pm Post subject: |
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Problem is the Oligrachs over spent their money and over leveraged. They margin their stock in guessing that stock will increase 25% every year. The stock market has decreased by over 50-60% and now the banks have called in their loans, but Oligarch do not have any money pay for it, so they are forced to sell assets, which make stocks plummet which makes for margin calls. Foreign investors are avoiding purchasing, because what happened to TNK-BP, Shell, and other foreign companies in Russia.
Assets may including real estate which was overvalued in the first place. So Real Estate prices are going to plummet. Credit is going to dry up, so car sales will be reduced. Construction industry will not be making so many projections.
Less construction, less investment, and less manufacture jobs, means a bad time for the average Russian.
Time to put change in the banking structure in Russia and stop the "I am a Putin Pal" club of easy loans. |
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