It’s obviously Mysterious Russian Billions day today. Not only do we have the
shady Oleg Deripaska paying $1.54
billion for a 15% stake in Magna, a Canadian auto supplier, but we also
have the even shadier Prana, whatever or whoever that might
be, paying $3.9
billion for a shabby 22-story building in Moscow and a few other assets
of dubious value.
In the case of Deripaska, the Wall Street Journal hints at possible national-security
implications, since the Russian oligarch has been denied a visa to enter the
US and will now presumably be part of Magna’s bid for Chrysler. Says the article,
Though owned by a German parent, Chrysler is still considered a U.S. company
in that it continues to design, develop and manufacture cars and trucks in
North America and employs about 80,000 people here. If Chrysler does work
for the Defense Department, or has operations that are deemed of national-security
interest, the deal could be subject to review by the Committee on Foreign
Investment in the U.S.
I have no idea what this is talking about – I’m pretty sure that the
PT Cruiser isn’t
in fact part of a top-secret plan to take over the world by means of retro styling.
But in any case, the Prana deal, for the old Yukos headquarters, is even more
mysterious: the company got into a massive bidding war with Rosneft (707 bids
and counterbids in all) for an asset which doesn’t seem to be worth anything
near its final price.
"We considered the lot interesting and we went as far as we were prepared
to go," said Rosneft spokesman Nikolai Manvelov, without explaining why
it was worth almost $4 billion.
The bidding amounts appeared unjustified by the value of the 22-story Moscow
headquarters building and several other buildings in the city center.
"In the investment sales market, the largest sales of office buildings
have been around $120 to $140 million. This is off the scale," said Christopher
Peters, head of research in Moscow at real estate firm Cushman & Wakefield
Stiles & Riabokobylko.
Some observers of the auction said it was possible the bidders knew about
hidden value in another asset in the lot.
I smell the plot for a spy novel here. But in any case, this is Russian capitalism
for you. Money? Yes, lots. Transparency? Not so much.