Posted on 12/05/2006 2:42:34 PM PST by Tailgunner Joe
The Russian billionaire Mikhail Fridman is moving into the military contracting business through a joint venture with a state arms export monopoly that is central to plans by President Vladimir Putin of Russia to guide the development of strategic industries like carmaking and aviation.
Fridman's Alfa Bank, one of the biggest Russian lenders, and Rosoboronexport are setting up the 50-50 joint venture, called Patriot Capital, that will help raise funds for the arms industry. It will also advise on restructuring debt and attract investment for upgrading equipment, the bank, based in Moscow, said Monday.
The new venture will help overhaul military companies and keep them within state control. It will also safeguard companies against hostile takeovers, Rosoboronexport said Tuesday.
Putin is using cash generated by record oil prices to increase state control of crucial industries. The Russian leader served in the KGB in East Germany at the same time as the Rosoboronexport chief executive, Sergei Chemezov. Putin has given Chemezov the task of supervising the restructuring of the military industry in Russia, the world's third- largest arms exporter after the United States and France.
"We will work as a certain instrument that, in a crisis situation, in a short time will study the situation, give anti- crisis recipes and in case of necessity help attract financial resources," said Aleksei Trufanov, chairman of Oboronreformproekt, the Rosoboronexport subsidiary that is setting up the venture with Alfa Bank.
Rosoboronexport, which has more than $22 billion in orders, last year took control of AvtoVaz, the largest Russian carmaker, and this year bought a controlling stake of VSMPO-Avisma, the world's biggest titanium producer and a supplier to Boeing.
Russia is setting up as many as 45 holding companies that will manage about half of the state's military enterprises by 2010.
(Excerpt) Read more at iht.com ...
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