By Nataliya Vasilyeva
The Associated Press
MOSCOW — They amassed some of the world’s biggest fortunes in the wild privatizations of Russia’s post-Soviet chaos and the oil boom that followed. Now some of Russia’s richest men are facing the choice of losing some of their empires or pleading at the Kremlin’s doors for a bailout.
Mikhail Fridman, one of the original oligarchs of the 1990s, was the first to come forward. His Alfa Bank said Friday it was seeking $400 million in government loans to stave off foreign creditors.
The cash would allow the bank to avoid handing over its 44 percent stake in the major Russian mobile phone company VimpelCom, which it pledged to a group of foreign banks led by Deutsche Bank as collateral for a $2 billion loan.
But to get the money, Fridman and the other oligarchs lining up for government loans are expected to have to hand over to the state as collateral the stakes in their companies that they used to secure the foreign loans.
And they may find the Kremlin attaching other strings as well.
Such moves could clear the way for the Kremlin to reclaim some of the prize assets it lost in the 1990s and further tighten its hold on Russia’s economy – or simply tighten its embrace of the business moguls.
It would be a reverse of the controversial privatization deals that gave the oligarchs their start. In the deals, known as “loans for shares,” the oligarchs took major stakes in state-owned oil and metals companies as collateral for loans to the government. The loans were never paid back.
In recent years, many of the wealthy businessmen borrowed heavily abroad, often using their firms’ stock as collateral. When Russian stocks plunged over the past few weeks, their creditors began demanding that they put up more collateral or risk losing their shares.