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
Russia Tycoons Seek $78B Kremlin Bailout
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)

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. (More Russia stories.)

Get the news faster.
Tap to install our app.
Install the Newser News app
in two easy steps:
1. Tap in your navigation bar.
2. Tap to Add to Home Screen.