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Russia’s richest man to buy Nets, build arena

Billionaire, metals mogul Prokhorov will fund half of new facility in Brooklyn

Image: ProkhorovAP
Mikhail Prokhorov, who owns a share in the Russian basketball team CSKA, was ranked as the country’s richest man in the Russian edition of Forbes, with an estimated fortune of $9.5 billion.

Los Angeles Lakers guard Derek Fisher, who also is president of the NBA players’ association, said the deal “speaks to the fact there’s something that potential ownership groups still see about the NBA that is good because you wouldn’t have anybody — European, Russian, American — buying into an NBA team at this point if they didn’t see something that was a positive for them to get out of the deal.”

Prokhorov’s Onexim Group announced the deal jointly with Forest City Ratner Cos. and Nets Sports and Entertainment. According to the agreement, entities to be formed by Onexim Group will invest $200 million and make funding commitments to acquire 80 percent of the NBA team, 45 percent of the arena project and the right to buy up to 20 percent of the Atlantic Yards Development Co., which will develop the non-arena real estate.

The NBA will review the proposal, and the deal must be approved by three-fourths of its board of governors. Ratner and Prokhorov said they hope to have the sale completed by the first quarter of 2010.

“I have a long-standing passion for basketball and pursuing interests that forward the development of the sport in Russia,” Prokhorov said in a statement. “I look forward to becoming a member of the NBA and working with Bruce and his talented team to bring the Nets to Brooklyn.”

While the proposed deal would give Ratner’s group an infusion of money for the arena project — he faces a December deadline to break ground or lose access to financing from tax-free bonds — there is fervent opposition to the additional 22-acre residential and commercial real estate development. It would create more than a dozen residential and office towers with more than 6,400 apartments built over property that includes a rail yard, warehouses and several blocks of homes and businesses.

Critics include homeowners who say the government is illegally claiming their property and thousands of residents who worry about how the skyscraper project will affect their neighborhoods.

New York’s Court of Appeals is to hear an eminent domain challenge to the project next month.

Develop Don’t Destroy Brooklyn, the project’s leading opponent, accused Ratner of being untrustworthy, noting he had repeatedly said the Nets were not for sale.

“The only reason Ratner would make this deal is because he is in dire financial trouble,” spokesman Daniel Goldstein said. “If Ratner has to go overseas to get major funding for the arena, how on earth is he going to finance the rest of the project?”

Prokhorov, 44, shot to prominence in the chaotic early years of privatization deals that followed the collapse of the Soviet Union. In 1993, the Onexim bank he headed acquired Norilsk Nickel, one of Russia’s huge but lumbering industrial conglomerates.

Under Prokhorov, Norilsk become more efficient and profitable. He resigned as Norilsk chairman in 2007 and sold his shares for $7.5 billion, but retains substantial interests in other metals companies through Onexim, including shares in gold-miner Polyus and Rusal, the world’s largest aluminum company. Onexim’s other interests include real estate, insurance and energy.

© 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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