#7 - JRL 7282
Financial Times (UK)
August 9, 2003
Abramovich tries to sell assets
By Andrew Jack in Moscow

Roman Abramovich, the Russian billionaire who bought Chelsea football club for £150m, is stepping up efforts to liquidate his investments in Russia as pressure mounts on the country's influential business "oligarchs" ahead of December's elections, say people with whom he has held talks.

One businessman indicated he had been approached to buy Mr Abramovich's 50 per cent stake in RusAl, the country's leading aluminium group, but had turned down the offer.

"He is trying to sell everything," said the businessman, who did not want to be named. He also cited Mr Abramovich's plans to dispose of his investments in the Omsk Bacon factory and the Rospromavto automobile group, which he acquired in the past four years.

"He doesn't want to be an oligarch but just an investor. He wants to keep investments but have more flexibility and cash, and be more international."

A person close to Oleg Deripaska, the Russian businessman who owns the remaining 50 per cent of RusAl, confirmed there had been sale talks and that Mr Deripaska was attempting to raise an estimated $3bn (£1.8bn) to buy out Mr Abramovich.

The discussions follow an intensive campaign against Yukos, Russia's largest oil group, and fears that it might spread to other companies.

Prosecutors have opened eight separate investigations and imprisoned two Yukos officials since the start of July, in what many see as a politically motivated action.

Mikhail Khodorkovsky, chief executive of Yukos and its largest shareholder, said last week that the decision this spring to merge with rival oil group Sibneft - of which Mr Abramovich owns more than 90 per cent - was the trigger for the investigations.

The Yukos-Sibneft merger would cut Mr Abramovich's stake in the combined group to a little more than 25 per cent, reducing his profile and offering him new options to liquidate his remaining holding.

He is believed to have held discussions with western oil groups for the sale of the Sibneft stake, and continuing talks - including with ChevronTexaco of the US - suggest he may still sell this stake whether or not the merger with Yukos goes ahead.

At the end of last year, Sibneft secretly paid Mr Abramovich an advance dividend of $1bn on 2002 profits, allowing him to extract significant cash from the company.

Last month, it announced a further $1bn interim payment for 2003 and has pledged that the combined Yukos-Sibneft group will pay out 40 per cent of net profits in future years.

Mr Abramovich became a member of parliament and then governor of the far eastern Arctic region of Chukotka but has always kept a low public profile. His investments are held offshore, and Millhouse Capital, the management company for his assets, is registered and based in the UK.