Deutsche hits second billionaire with margin call
Deutsche Bank has hit a second Russian businessmen in less than a month with a billion-dollar margin call as some of the country’s richest men continue to struggle with the double problem of falling share prices and large bank debts.
Alexander Zanadvorov, the owner of Russian supermarket chain Seventh Continent, which is partly owned by US buyout firm TPG, faces having to hand over a 74.8% holding in the company to Deutsche Bank and Nordea Bank Finland after being served with a $1bn (€786m) margin call by the banks.
Seventh Continent shares have lost half their value this year, nearly all of which has come in the last month as the Russian stock markets collapsed in the wake of the global financial crisis.
Zanadvorov had used his holding in Seventh Continent as collateral against a $1bn loan from Deutsche Bank and Nordea, however the fall in the share price has left him facing a margin call from the banks, although analysts expect a deal to be reached. Anna Kochkina, an equity analyst at UniCredit in Moscow, wrote in a report this morning that the banks may agree to restructure the debt to avoid taking ownership of the company.
Deutsche Bank last month came close to taking a controlling stake in Russian mobile operator Vimpelcom after issuing a margin call to Alfa Group, the investment vehicle of billionaire businessmen Petr Aven and Mikhail Friedman, on loans worth $2bn.
Several prominent Russian billionaires have faced margin calls in the last two months, including the country’s richest man Oleg Deripaska, who had to give up a holding in a Canadian autoparts company as well as being forced to borrow from the government to refinance loans collateralised against his holding in aluminium giant RusAl.
Deutsche Bank declined to comment. Seventh Continent did not immediately reply to a request for comment.
-- Write to Harry Wilson at hwilson@efinancialnews.com
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