Int'l banks ask Russia govt help in RUSAL-Alfa case

By Polina Devitt and Guy Faulconbridge ADVERTISEMENT MOSCOW, March 17 - International banks owed $7.4 billion by United Company RUSAL have asked Russia's government to intervene in a dispute between the world's largest aluminium firm and Alfa Bank, which they say threatens a debt freeze deal. The co-ordinating committee of international banks, in a letter addressed to senior Kremlin economic aide Arkady Dvorkovich, and seen by Reuters, has requested a meeting with government officials in Moscow this week to resolve the issue. "The international banks view the Alfa Bank situation as a Russian issue and we strongly believe it requires a Russian solution," the banks wrote in the letter. A Western banker with knowledge of the matter confirmed the letter was genuine. He spoke on condition of anonymity because of the sensitivity of the situation. Russian President Dmitry Medvedev on Monday warned Russian banks against destroying large, crisis-hit companies in remarks that could signal support for UC RUSAL's largest shareholder, Oleg Deripaska. [ID:nLG661151] The issue of whether the state should bail out billionaires who face difficulties in paying back foreign loans taken out during a decade of economic boom is at the heart of the debate about anti-crisis measures needed to salvage Russia's economy. Alfa Bank, controlled by billionaire Mikhail Fridman, is pursuing Deripaska's investment company, Basic Element, for about $1 billion it says the indebted metals billionaire owes the group. [ID:nLB941862] UC RUSAL has signed a two-month standstill agreement on the $7.4 billion it owes to international banks, with a view to securing a long-term restructuring agreement. [ID:nL6502607] The co-ordinating committee said it had received letters from all Russian banks, except Alfa Bank, saying that they would abide by the same standstill principles. UC RUSAL's total debts amount to $14 billion. The committee said in its letter that "any legal action by another creditor constitutes a termination event under the terms of the SWA ". The international lenders had agreed to waive the current court filing and allow one month "to resolve the Alfa Bank issue", the letter said. "We would very much like to discuss the Alfa Bank issue and the general way forward in relation to the long-term restructuring with the Russian government," it said. "We therefore suggest to arrange a meeting with you and perhaps other government officials in Moscow next week, at your earliest convenience," the letter, sent on Friday, said.