Billionaire to Invest in Russia
Posted on Wednesday, October 1st, 2008 | In RussiaLeave it to a Russian to invest in Russia. Monday The Associated Press reported that Mikhail Prokhorov would take 50% stock in Renaissance Capital, one of Russia’s leading investment banks.
To invest in Russia by taking control of the large investment bank, Prokhorov’s Onexim Group will pay $500 million, half of which was transferred on Monday, September 29th. On top of Prokhorov’s plan to invest in Russia by funding the bank, he has also promised Renaissance Capital more loans to come.
As part of the RenCap Prokhorov deal to invest in Russia, the parent firm Renaissance Group will maintain management and board control of the bank, with 50% plus one share of the voting rights, and Prokhorov will have the ability to choose three individuals for the board of directors.
Prokhorov on his move to invest in Russia, said, “The rules of the game for investment banking globally have been totally rewritten in the last few months and the last few weeks in particular. The type of ownership structure that can work is completely different to what it was even several weeks ago.”
Following the most volatile week of trading since the financial collapse of 1998, markets began a sort of recovery after the government spent $120 billion to invest in Russia, via various measures such as buying shares in majority state-owned companies.
Though Prokhorov states that his plan to invest in Russia via the RenCap deal has been in the making for several months, only time will tell if such tycoon’s with a desire to further invest in Russia will truly keep the nation’s economy afloat.
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