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By Polina Devitt, Anastasia Onegina
3 Min Read
MOSCOW (Reuters) – Russia’s richest man Mikhail Prokhorov is preparing an offer to help the New Jersey Nets build a new arena and sources close to him say he could own a large stake in the NBA club as part of the $700 million deal.
Russian billionaire Mikhail Prokhorov listens to a question during a news conference in Moscow, May 31, 2007. REUTERS/Sergei Karpukhin
Russian billionaires, dubbed the oligarchs, have splashed out on yachts, mansions and sports clubs as commodity prices soared in recent years. In the highest-profile deal, Roman Abramovich bought London soccer club Chelsea in 2003.
A spokesman for Prokhorov’s Onexim investment vehicle confirmed on Thursday it had been approached to participate in building the Nets’ long-awaited arena in Brooklyn and was preparing an offer.
“As we have said before, we have received interest from potential investors in the team,” Nets CEO Brett Yormark said in a statement. “That interest is growing as it is clear that we are moving to Brooklyn.”
Officials with the National Basketball Association were not immediately available to comment.
Developer Bruce Ratner owns the Nets, which Forbes magazine in December ranked as the 26th most valuable of the 30 NBA teams with an estimated value of $295 million.
In addition to the arena, Ratner’s company Forest City Ratner proposes constructing 16 office and apartment buildings, and upgrading subway, utility and other infrastructure as part of a larger project.
Legal disputes, financing problems and challenges from local community groups have dogged the project for years. In June, Ratner dropped architect Frank Gehry to cut costs, further irking critics — Gehry’s design was a key factor in winning public support for the project in the first place.
Prokhorov is considering issuing a bond worth $700 million through Onexim to help fund the project, one source close to the deal said.
The source said the bond must be issued before the end of 2009 so it is exempt from government taxes, adding: “This is a pure business story. The value potential of the club and arena are very high.”
Another source familiar with Prokhorov’s plans said the billionaire may end up owning a stake in the club as part of the deal.
Prokhorov, who towers over colleagues at 2.06 meters (6 foot 9 inches), has an estimated fortune of $9.5 billion according to the Russian edition of Forbes magazine.
A former chief executive of Norilsk Nickel, he came under the international media spotlight more than two years ago when he was briefly detained in a prostitution probe in a French ski resort. He was released without charge.
While many of his Russian peers sought state bailouts, the 44-year-old former banker and mining executive has become flush with money after cashing out of assets in 2008 before the global financial crisis caused commodity prices to crash.
(Additional reporting by Ben Klayman in Chicago)
Writing by Dmitry Zhdannikov; Editing by Sonia Oxley and Justin Palmer; To comment on this story: firstname.lastname@example.org
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