Rusal first in line as Moscow agrees bail-out

Russia's state development bank yesterday approved $10bn (?6bn, €8bn) in refinancing for cash-strapped oligarchs as the first step of a $50bn government bail-out that could redraw the country's business landscape. As part of the package, Oleg Deripaska's UC Rusal holding company was set to receive a $4.5bn loan that it will use to repay in full a syndicate of western banks, including Royal Bank of Scotland and Merrill Lynch, that Mr Deripaska has been scrambling to pay by a Friday deadline, people familiar with the situation said. Approval of the government loan, which is to be disbursed in the next few weeks, would make it easier for Rusal to persuade the banks to agree an extension of the deadline until the end of November, these people said. "It looks like everything is slotting into place," said one person close to the creditors. Mr Deripaska, Russia's richest man, has been racing to secure state refinancing for the loan after the value of the 25 per cent stake in Norilsk Nickel he pledged as collateral tumbled in breach of covenants. Earlier efforts to win refinancing from the western banks failed. But the Russian government is likely to exact a high price for the lifeline to his empire. The terms of the bail-out package were yet to be hammered out, one person close to the situation said. However, government officials have said that VEB, the state development bank, would demand the same stakes as collateral as those pledged to the western banks. As a result, Mr Deripaska's stake in Norilsk, the world's biggest nickel miner, is likely to remain under pressure. Some government factions are eyeing the creation of a state metals and mining champion and Mr Deripaska is already battling Vladimir Potanin, a rival owner, for control of the company. Rusal declined to comment yesterday, as did VEB, although it confirmed that $10bn in loans had been approved. Mikhail Fridman's Alfa Group will also be a recipient of the first wave of state bail-out funds after his telecoms arm, Altimo, failed to meet margin calls last week on $2bn in loans from a syndicate of western banks led by Deutsche Bank. People close to the creditors said Deutsche Bank had received a letter of credit from VEB on Tuesday, allowing the two sides to agree that the loans would be repaid in full. It was not immediately clear which other Russian oligarchs would receive the first set of refinancing for foreign loans. But Mr Potanin, the owner of a 30 per cent stake in Norilsk, still looked to be under pressure.Interros ---the FT.com