duedee.com

NEW YORK and MOSCOW, Oct. 11 /PRNewswire/ -- As the global financial crisis unfolds in Russia, the country's once invincible oligarchs are facing liquidity shortages. At a recent round table hosted by the Russian Press Center in Moscow, it was reported that Russia's richest man, Oleg Deripaska, might be facing technical default. Deripaska's company, Rusal, cannot pay back a $1.4 billion loan to Onexim Group, the holding company owned by Mikhail Prokhorov.

Earlier this year, Prokhorov sold Deripaska his stake in Norilsk Nickel, the world's largest nickel producer. Prokhorov is set to receive two payments of $700 million from Deripaska in the coming months, the business daily Kommersant reported. However, it is unlikely that Deripaska, whose wealth peaked at $28 billion in 2007, will be able to meet these payments.

According to sources close to the deal, Prokhorov has made it clear that he will file suit against Rusal Holding, the British Virgin Islands-based company controlled by Deripaska, if Deripaska does not make payment including penalties. If not bailed out, Deripaska will be in technical default, with more than $10 billion in debt, a source close to Onexim Group said.

Deripaska's money problems in turn affect Prokhorov's financial situation. Prokhorov, who is currently No. 24 on the Forbes list, confirmed last week that he is pulling out of an asset split with his business partner, Vladimir Potanin, citing force majeure. Prokhorov and Potanin signed an asset split agreement on September 14, 2008, in which Prokhorov received control of the Russian gold miner Polyus Zoloto and Potanin received 2% of Norilsk Nickel. Prokhorov was also to pay Potanin $1.05 billion.

Prokhorov's financial predicament follows a spate of bad investments in recent months, including spending $500 million for a 50% stake in the failing Russian investment bank Renaissance Capital, and bankrolling Snob, a media startup. Russian media have also reported that Onexim Group may face criminal prosecution over Intergeo, a geological development company headed by former Norilsk Nickel manager Maxim Finsky. Finsky moved some Norilsk assets to Intergeo, which became part of Prokhorov's holding.