Dec 24, 2009
Russian Banks get into the act
Russians step in a big way to track out of the current depression probably emboldened by their presence on social media like facebook and social gaming. In a bid to follow on to traces of Russin gumption as commodities continue to have a not so nice time in the global markets especially russian assets and Greece and Portugal ready to implode
Prokhorov’s MFK bank said on Tuesday it would get three new shareholders.
The combined wealth of the four tycoons was estimated at around $19bn (£12bn) by the Russian edition of Forbes magazine, and some of this money is in cash.
“Active work on solving Russian firms’ debts and offering help to the state to restructure the national banking system have a special place in our new strategy,” MFK’s chief executive Alexander Popov said.
Prokhorov, also a stakeholder in the world’s largest aluminium firm RUSAL, is worth $9.5bn, down from $22.6bn in 2008.
While many of his Russian peers have sought state bailouts, Prokhorov is flush with money after cashing out of assets in 2008 before the global crisis caused commodity prices to crash.
Kerimov was one of the top investors in state banking and energy majors such as Sberbank or Gazprom, but later reduced his stakes to buy into Western banking majors just before the crisis wiped out most of their value.
Kerimov, ranked Russia’s 13th richest man with $3.1bn, has also never asked for a direct state bailout like his peer Vekselberg, whose empire also includes large stakes in Swiss technology group Oerlikon and Swiss engineering group Sulzer. Vekselberg is worth $1.8bn.
The only tycoon out of the four who has received direct state funding during the crisis is Abramov, whose Evraz has already repaid part of a $1.8bn loan to the state. Forbes rated Abramov sixth in May with $4.4bn.
Sources close to the bank told Reuters the tycoons plan to turn MFK into a top Russian private banking player.
via Reuters
Prokhorov is already restructuring debt for Rusal helping Oleg Deripaska’s 3% stake ib British CV maker LDV. Though an overnight market for private equity is unlikely, their ambition does show a likely intent to step into new fields with a bang and at least some of it could implore the SWFs like Kazakhstan and other state millionaires to come into global deals.
Unfortunately, global ambitions of Religare, M&M and Reliance seem as ill-placed as that of Tata and Suzlon in 2007. It needs much more international policy support and subsidy to take on foreign units with their workforce follies and high cost structures leaving it to global muscle like Mittal ( of Arcelor Mittal) and GM to try taking sick units out of bankruptcies. Even a Volksagen looks competent to manage its ne investments as others like Prokhoov, Keshub Mahindra and Tulsi Tantis get increasingly frustrated and eager to do the rong deals beacue they fit on thei plate by some old definition. A Mahinaldra Satyam did not even try to act transformational in its bid for cash from Satyam and the same evaluations are required for the LDVs and the Lyondell Basells which would be a litmus test for any new Mikhail Prokhorov to come to the table and go out a Arcelor Mittal.
Indian entrepreneurs must also be feeling eager to get into business ith their Russian and middle east counterparts to steward the scuttled global midships and put the world back on an even keel, but a dry docks specialist ith a salvage yard may be a minimum requirement even for Prokhorov, Mahindra and the Ambanis. China would be a formidable competitor and maybe it is affecting deal making capability of other JP Morgan customers 
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