Russian media on Monday was filled with reports that Mikhail Prokhorov is selling all his Russian assets, a vast pool of mining, metals, media, real estate, insurance and property companies, with the implication that he's being forced out by former presidential rival Vladimir Putin. Prokhorov's No. 2, Dmitry Razumov, denied the rumor, but admitted ONEXIM, Prokhorov's investment vehicle, is looking into selling some assets.
The Nets and Barclays Center are owned by a U.S.-based company, ONEXIM Sports & Entertainment, which has no corporate ties to the Moscow-based company other than they are both owned by Prokhorov.
The supposed sale was first reported by Vedomosti, the Russian business journal that implied the Kremlin, fed up with his media outlet's exposes, wanted to push him out. Such a distress sale, of course, would likely mean Prokhorov would be selling assets at far under market value. And in Russia, when such sales take place, the buyer is usually Kremlin-friendly.
The Moscow Times, the city's English language newspaper, reports...
Analysts and insiders have claimed links between RBC's coverage of the Panama Papers and a raid by Russia's Federal Security Service (FSB) on ONEXIM Moscow headquarters in April. Searches were also carried out at several other businesses controlled by Prokhorov, including his investment firm Renaissance Capital, power generating company Quadra and the International Financial Club (IFC) bank.
.Putin's spokesman denied that Prokhorov was under pressure to sell his assets, telling Vedomosti that the claims were "nonsense." And Razumov, who is also chairman of the Nets, provided NetsDaily with a statement denying any wholesale disposal of assets.
Onexim Group is one of the largest investment funds in Russia, with interests in many sectors of the economy. Our assets are constantly in a state of transition and we are always in the process of negotiations for sales and acquisitions and attracting new partners. Many of these negotiations continue over the course of years.
It would not be right to conclude that we are "selling off our Russian assets." No such decision has been made. Onexim Group was, is, and will remain a major player in the Russian market, maintaining a strategic interest in investments here in Russia. First and foremost among these involves the financial sector, where we plan to devote particular attention to our banking institutions Renaissance Credit, Renaissance Capital, IFC Bank and the Soglassye insurance company.
What could it mean for the Nets? According to Forbes, Prokhorov's net worth has shrunk from $18.3 billion in 2009 when he bought a majority interest in the team, to $7.9 billion this year. Part of that drop has to do with currency fluctuations as well as sanctions against Russia in response to its intrusion into Ukraine and takeover of Crimea. If it took place, a distress sale would shrink that net worth further.
There has been no recent dropoff in spending on the Nets or other sports assets by Prokhorov. In fact, the reverse has been true. In the past eight months, Prokhorov has acquired the 20 percent of the Nets and 55 percent of Barclays Center he didn't own as well as 85 percent of Nassau Coliseum. ONEXIM also completed work on the $50 million HSS Training Center in Sunset Park and paid out a $6 million fee to re-join the D-League.
However, the political situation in Russia is increasingly volatile and Prokhorov, with his high profile American assets, has become a target. It's also likely to renew rumors that he wants to sell all or part of the Nets.