Strabag gives Deripaska three weeks to buy back stake

Oleg Deripaska’s Basic Element has been given until November 5 to buy back a 25% stake in the Austrian builder. The Russian firm had to return its stake to Strabag’s main shareholders in late 2009 after it failed to refinance part of the debt it used to acquire it for €1bn in 2007.

Basic Element (Basel), a construction company owned by Russian billionaire Oleg Deripaska, is set to re-acquire its 25 percent stake in Austrian firm Strabag by November 5, both firms announced in a statement.

Strabag had originally given Basel until last Friday, October 15, to buy back its interest in the Austrian company but has subsequently extended that deadline by three weeks, until November 5. “This additional time technically enables the parties to finalise the drafting and subsequently sign the necessary legal documents for the transaction,” the companies said.

Basel had originally acquired a 25 percent stake in Strabag in 2007 for about €1 billion. The deal was partly financed with a €500 million loan from the family of Strabag chief executive Hans Peter Haselsteiner and Austrian bank Raiffeisen – both Strabag shareholders, with stakes of 25 percent each.

But when Basel failed to refinance its loan in late 2009 as a result of the financial crisis, the stake reverted back to Strabag’s main shareholders. However, both companies maintained an interest in continuing their partnership.

In a March interview with Infrastructure Investor, Roland Jurecka, the head of Strabag’s concessions unit, explained why the Austrian company is keen to maintain its partnership with the Russian billionaire:

“Russia, being next door to our core markets, became the largest target for our expansion,” Jurecka said. “Our partnership with Deripaska is to be viewed precisely in this context – we thought that having a Russian shareholder would protect our interests against political risk,” he admitted.

Strabag has been present in Russia, as a construction company, for 19 years. It has also participated in the bidding for Russian public-private partnerships and was actually awarded a €5 billion contract to build a ring road around St. Petersburg, before the project was derailed by the financial crisis.