Russia Tycoons Seek $78B Kremlin Bailout

Looming foreign debt forces oligarchs to return power to state
By Rebecca Smith Hurd,  Newser User
Posted Dec 22, 2008 10:33 AM CST
Russian billionaire Roman Abramovich, who won a legislative seat in the remote Russian Arctic region of Chukotka in 2006, has already received financial aid from Prime Minister Vladimir Putin.   (AP Photo)
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(Newser) – A dozen years after bailing out the Soviet government, Russia’s oligarchs are seeking $78 billion in Kremlin handouts to weather the credit crunch, Bloomberg reports. Russian businesses have racked up some $110 billion in foreign debt due in 2009. The one-year loans, sought by more than 100 companies, would likely shift control of some industries back to the state.

“It’s extremely unlikely they’ll all be able to repay in a year,” said one money manager, with the financial crisis having picked $230 billion in equity from Russia’s wealthiest pockets. Without state help, over-extended industries (particularly steel) could be tapped out. “If they have to pay this, then they have no money for capital expenditure, no nothing,” an economist said.