Leighton's Russian partner snared in financial scramble

OLEG DERIPASKA, the Russian oligarch who is planning a joint venture with Leighton Holdings in Mongolia and Siberia, has been forced to sell his 10 per cent stake in Leighton's majority shareholder, Hochtief, because of the financial crisis.

Mr Deripaska, who also controls large stakes in the Russian metal giants Rusal and Norilsk, sold the stake in the German construction company on Friday after being hit by a margin call from Commerzbank, which had lent him funds to acquire the stake.

The previous week, the multi-billionaire's holding company, Basic Element, was forced to hand over a 20 per cent stake in the Canadian auto parts company Magna International to BNP Paribas. The French bank called in a $US1.5 billion loan following a collapse in the company's market value.

It is unclear whether Mr Deripaska's financial troubles could jeapordise the agreement with Leighton. On Friday Basic Element said that, despite selling the stake in Hochtief, "joint infrastructure construction projects in Russia will continue as planned".

In an unrelated interview with the Herald on Thursday, Leighton's managing director, Wal King, mentioned the Mongolian joint venture as a bright spot for potential business if the Australian mining industry suffered setbacks.

"The world is not going to stop growing," he said. "What you are seeing is a redistribution of wealth from the Western economies to the emerging economies."

In August Leighton said the deal with Mr Deripaska would be finalised after Basic Element employees had visited the construction and mining services group's Australian operations.

Basic Element was the previous employer of OZ Minerals' chief executive, Andrew Michelmore, who returned to Australia after two years with the Russian company.

Mr Deripaska, whose wealth was once estimated to be as much as $US28 billion, is not the only Russian oligarch with Australian connections to have suffered in the financial crisis. Roman Abromavich, the owner of England's Chelsea football team, has seen a $US20 billion decline in value of his holding in the steel company Evraz.

Evraz is the largest shareholder in the West Australian iron ore explorer Cape Lambert Iron Ore. It recently bought a 75 per cent stake in the company's namesake project from China Metallurgical.