By Dmitry Zhdannikov
MOSCOW, Jan 6 (Reuters) - Russian-born billionaire Len
Blavatnik's international empire faces its biggest test with
Tuesday's bankruptcy filing by a key component, the U.S.
operations of LyondellBasell, the world's No. 3 petrochemical
maker.
In two decades of impressive but highly leveraged growth
fueled by Soviet-era links, U.S. citizen Blavatnik became a
rare middleman between Western capital and a new generation of
Russian entrepreneurs in the early 1990s.
His business interests stretch from the United States to
Kazakhstan, and his $11 billion fortune ranks him 28th on the
Forbes list of the 400 richest Americans. Google co-founder
Sergey Brin is the only Russian emigrant to rank higher.
Blavatnik was a pioneer in converting his Russian wealth
into large assets in Europe and the United States, a path
later followed by many Russian metals and oil barons.
He once earned $675 million on a Russian asset that
previous owner George Soros rated his worst ever investment.
Blavatnik, who a spokesman said was not available for
interview, is now in the vanguard of a less welcome trend as
the global financial crisis strips the wealth of Russian
tycoons.
The U.S. operations of LyondellBasell filed for bankruptcy
protection in a New York court on Tuesday. The company took on
billions of dollars in debt a year ago, when Blavatnik led a
$12.7 billion leveraged buyout of Lyondell by Basell of the
Netherlands.
Blavatnik, 51, emigrated to the United States in 1978,
turning his back on a career as a Soviet engineer after four
years of studies in Moscow's Transport Engineering Institute.
Three years later he became a U.S. citizen. He retained his
appetite for studies, receiving a master's degree in computer
science from Columbia University and an MBA from Harvard
Business School.
His education, coupled with his title of chairman of then
little-known investment firm Access Industries, was guaranteed
to impress any potential partner in the former Soviet Union in
the early 1990s. One knew Blavatnik better than most.
Viktor Vekselberg, a fellow student at the Moscow
institute, aligned his Renova company with Access Industries to
begin a decade-long crusade to capture Soviet oil and aluminum
assets after the collapse of Communism.
Both men played big roles in Russia's privatization
auctions. They ended up with significant stakes in Russia's No.
3 oil firm, TNK-BP TNBPI.RTS, and the world's largest aluminum
producer as well as coal, telecoms, media and real estate
assets.
Blavatnik once bought 25 percent of Russian national
telecoms firm Svyazinvest for $625 million from Soros in 2006,
eight years after Soros paid $1.875 billion for the stake.
Blavatnik later doubled his money selling the stake for
$1.3 billion to Russian billionaire Vladimir Yevtushenkov.
PUBLICITY SHY
Blavatnik rarely gives interviews, and has even avoided
having a link on www.compromat.ru, a website featuring rumors
about wealthy people with links to Russia.
He sits on the academic boards at Cambridge University,
Harvard Business School and Tel Aviv University and sponsors
the Babylon exhibition at the British Museum in London, which
runs until March 15.
Blavatnik retains an interest in Russia as a board member
of aluminum leader United Company RUSAL and owner of a 12.5
percent stake in TNK-BP. He is estimated to have made $2
billion when Access/Renova and a third shareholder, Alfa Group,
sold half of the company to oil major BP for cash and shares.
Blavatnik's other major investment in Russia, a minority
stake in UC RUSAL, also faces problems. Debts of $14 billion
forced UC RUSAL's biggest shareholder, Oleg Deripaska, to ask
the Kremlin for help in refinancing debts.
RUSSIA RISKS
Blavatnik, active in Russia during the 1998 financial
crisis, is familiar with Russian risk. He bought German
petrochemical giant Basell in 2005 for 4.4 billion euros from
Royal/Dutch Shell and BASF.
Like many Russian-born peers, he drew heavily on loans to
grow his business. LyondellBasell struggles under $26 billion
of debt after Basell merged with Houston-based Lyondell in a
$12.7 billion deal in 2007.
Still, associates say Blavatnik will not quickly lose his
talent for big deals or his great connections.
(Additional reporting and writing by Robin Paxton and Megan
Davies)
- 
- 
- 
Welcome,
Guest!
News
