Canada's Magna International Inc. (NYSE:MGA) may have just driven into a spat between two Russian oligarchs.
Russian lender Alfa Bank -- owned by Mikhail Fridman -- reportedly is holding up a much-needed 39 billion ruble ($1.3 billion) debt restructuring at Russian carmaker OAO Gaz -- owned by Oleg Deripaska -- because, according to Alfa, two of Deripaska's aluminum producers have failed to make good on debt payment promises. The bank on Thursday said it asked two courts to put the units of Deripaska's UC Rusal aluminum company into bankruptcy because of the problems. Rusal is currently working to reshuffle $14 billion in debt with 50 different banks.
Essentially, the bank refuses to play ball on the Gaz restructuring if Rusal won't play in its restructuring game, which is where Magna comes in. Together with Sberbank, the Canadian company recently agreed to take 55% of General Motors Co.'s Adam Opel GmbH with an eye toward moving Opel and Gaz closer together to sell more cars in Russia. The plan may include Sberbank buddying up with another bank to buy the 60% of Gaz's debt they don't already control to take the carmaker from Deripaska -- but only if Alfa and Fridman will let them.
Or maybe it's just business as usual for Magna in Russia -- Deripaska last year was forced to sell his 20% Magna stake when the problems at his empire became apparent. - Andrew Bulkeley
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