Deripaska's firm says will keep Strabag stake-CEO

MOSCOW, Oct 5 (Reuters) - Russian billionaire Oleg Deripaska plans to retain his one-quarter stake in Austrian construction firm Strabag despite the financial crisis that forced the sale of a stake in Canadian auto parts maker Magna. Gulzhan Moldazhanova, chief executive of Deripaska's investment firm Basic Element, on Sunday sought to assuage concerns surrounding the empire of Russia's richest man by saying the company had enough liquidity to survive the crisis. 'On the whole, we don't see any problems regarding liquidity within the group,' Moldazhanova told reporters at a briefing. Deripaska became the first of Russia's multi-billionaires to publicly acknowledge the effect of the global financial crisis on Friday after he divested his 20 percent stake in Magna, bought for $1.4 billion a year ago. The investment was jeopardised as the stake pledged as collateral to lenders fell in value, giving lenders the right to demand either more shares as collateral or a cash commitment and raising fears that other businesses could suffer the same fate. Basic Element is an industrial conglomerate with interests spanning aluminium, banking, construction, aviation and cars. It valued its assets at $45 billion at the end of 2007. Moldazhanova said construction would enjoy a bright future even amid the current global economic uncertainty, protecting its investment in Strabag, whose stock closed down 4.1 percent on Friday. 'The global economy, and the economy of our country, is heading for a slowdown for a certain period. There are sectors that will overcome this problem more successfully than others,' she said. 'Construction, both housing and infrastructure, is a sector that has good prospects in the near term. Construction is a sector where life itself stimulates demand: people need to live somewhere, people need to work, people need to travel on roads.' MAGNA COOPERATION Basic Element posted revenues of $26.8 billion last year, up 45 percent from 2006. It owns Russia's second-largest car maker, Gaz, and is the majority shareholder in the world's biggest aluminium producer, United Company RUSAL. Deripaska's fortune was valued at $28.6 billion by Forbes magazine in May, but the businessman has repeatedly disputed this valuation as it does not include large debts assumed by his companies. UC RUSAL's debt alone is estimated at $14 billion. Moldazhanova said Basic Element would proceed with all projects that it had already started, but was re-evaluating proposals for which funding had not yet been secured. She said Russian banks were less vulnerable to the crisis than Western peers as they were less exposed to mortgages and other such lending instruments. Basic Element's banking arm Soyuz Bank was fulfilling all of its obligations, she added. 'All of the difficulties faced by Soyuz are of a structural nature and are linked to the system as a whole. There is nothing unique about them.' Moldazhanova said the retail sector was the most vulnerable within Russia. 'Risks are linked with the fact that money has disappeared and, when it does appear, it's very expensive.' She said Basic Element would also continue to cooperate with Magna to develop an auto components business in Russia. 'We have significant plans to develop our partnership with Magna in Russia,' she said. The company had divested its stake in Magna, which is run by Canadian tycoon Frank Stronach, because of the terms of the loan taken to fund the deal, Moldazhanova said. 'The current value of the stock simply does not reflect the quality of the company. We simply decided that the sort of credit that we had doesn't work for us any more.' ---by the forbes.com