Russian oligarch Deripaska to shrink property empire

Russian billionaire Oleg Deripaska, once the country's richest man, is moving to sell off his domestic construction empire as he grapples with his vast debts, a newspaper reported on Tuesday. The report prompted a clarification by a spokesman for Deripaska's holding company, Basic Element, who said the report was exaggerated and that just some elements could be sold as new investors were brought in.
The Vedomosti business paper said Deripaska had signed a deal with the Sputnik company of fellow entrepreneur Boris Jordan to help him sell part or all of his Russian construction concern, Glavstroi. Deripaska built his fortune in the aluminium sector and is known for his lavish lifestyle and hospitality. Last year the New York magazine Forbes estimated he was Russia's richest man, with a net worth of 28.6 billion dollars. But his the value of his holdings plunged to a mere 3.5 billion dollars, the same magazine reported last month.
Vedomosti estimated the total debts of Basic Element at 20 billion dollars. The paper cited a source close to the holding company as saying the move to sell off its Russian construction interests with Jordan was under way.
An acquaintance of Jordan's said the deal had been signed recently. However the spokesman for Basic Element, Sergei Babichenko, told AFP the report was inaccurate. "We're not talking about selling Glavstroi," said Babichenko. "We are working to attract partners in all businesses of the group. We don't rule out selling separate development structures in the construction sector."
Deripaska is under pressure from international creditors to pay back hundreds of millions of dollars he borrowed to finance the purchase of 25 percent of Austrian construction group Strabag. His Russian construction group, Glavstroi, owes the equivalent of 1.46 billion dollars (1.1 billion euros), of which more than half is due to Russian state bank Sberbank, Vedomosti reported.
Glavstroi's sprawling operations cover both municipal and state-level infrastructure and civil engineering, as well as building materials and commercial development. While the various parts of the company had been moving more into the commercial sector in recent years, Glavstroi may find state orders to be a more reliable source of income in the current economic climate, Vedomosti commented.