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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

(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.

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“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. (Read more Russia stories.)

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