Russia Bails Out Its Richest Man

Metal mogul Deripaska gets $4.5B handout to help pay loans from Western banks

By the Associated Press

Posted Oct 30, 2008 12:20 PM CDT

(AP) – The Russian government has agreed to loan $4.5 billion to metals magnate Oleg Deripaska to help him pay off a loan to a group of Western banks. While the state bank overseeing the bailout would not confirm the news, three newspapers have reported that Deripaska, who is considered Russia's richest man, will receive the cash to prevent foreign banks from seizing his metals company as collateral.

The state loans to Deripaska follow yesterday's $2 billion loan to Mikhail Fridman as the first credits extended under a $50 billion government bailout plan, which could shuffle Russia's business elite. The Financial Times adds that the Kremlin might extract a high price for the bailout: The government may nationalize the metals company, putting Deripaska in a fight for control of his own corporation.

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Oleg Deripaska, who made his fortune in the aluminum industry, is getting $4.5 billion from the Kremlin's $50 billion bailout fund to help his UC Rusal holding company pay off loans. (AP Photo)

President Dmitry Medvedev and the Russian government may demand the same collateral in return for bailout funds as was pledged to Western banks, the Financial Times reports. (AP Photo)

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The expansion of the government's presence in the economy is a forced measure that is of a temporary nature. - Russian PM Vladimir Putin

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Russia Bails Out Its Richest Man