Publication: Monitor Volume: 7 Issue: 33

Boris Berezovsky has reportedly started to implement his plan to “save” the media empire of his erstwhile bitter rival, Vladimir Gusinsky. The newspaper Izvestia, citing unnamed sources, reported today that Berezovsky had begun paying out the US$50 million credit he promised earlier this month to give Gusinsky’s Media-Most holding to help its media–which include NTV television, the Segodnya newspaper and Radio Ekho Moskvy–meet their day-to-day operating expenses. The paper said that Dmitry Ostalsky, Media-Most’s press secretary , confirmed the report, saying: “Boris Abramovich [Berezovsky] kept his word.” Ostalsky, however, refused to tell Izvestia how much Berezovsky had transferred to Media-Most. Earlier this month Berezovsky sent an open letter to the Russian Union of Industrialists and Entrepreneurs in which he promised to lend Media-Most US$50 million in order to keep it afloat and said that he would begin negotiations with Credit Suisse First Boston (CSFB) to buy out Media-Most’s debt to CSFB, which loaned the media holding US$262 million under a guarantee by Gazprom, Media-Most’s main creditor. That loan comes due in June. Gazprom, which presently controls 46 percent of Media-Most’s flagship television channel, NTV, claims it is owed an additional 19-percent NTV stake which Media-Most put up as collateral, along with 25 percent of the shares in its other companies, for the Gazprom-guaranteed CSFB loan. Gazprom officials, including its CEO, Rem Vyakhirev, have vowed to acquire a controlling stake in NTV. But that goal was dealt a blow on February 14, when the Moscow Arbitration Court postponed a suit Gazprom brought against Media-Most over the disputed 19-percent NTV stake (see the Monitor, February 8, 15).

Media-Most’s Ostalsky told Izvestia that if Berezovsky were able to carry out his plan to buy out Media-Most’s debt to CSFB, Gazprom would have to return all of the Media-Most shares the holding put up as collateral for the loan. This would leave Gazprom with only 46 percent of NTV–not a controlling share–meaning that Alfred Kokh, head of Gazprom-Media, would be unable to replace the NTV’s board of directors at an NTV shareholders’ meeting scheduled for March 12 in Gibraltar. Ostalsky refused to reveal the conditions which Berezovsky attached to the US$50 million loan to Media-Most. Gazprom-Media, for its part, had no comment on Berezovsky’s actions vis-a-vis Media-Most. While Berezovsky claims his bailout plan is aimed at protecting press freedom in Russia and resisting President Vladimir Putin’s authoritarian tendencies, others believe that Berezovsky’s ultimate aim is to take over Media-Most (Izvestia, February 16; see the Monitor, February 8).

Meanwhile, Kokh met yesterday with officials from the company Merrill Lynch, who are representing the interests of a consortium of Western investors (headed by CNN founder Ted Turner) which has promised to invest US$300 million in Media-Most and NTV in return for Kremlin guarantees not to interfere in that media’s editorial decisions. Among the consortium’s members are the financier George Soros and a number of European media concerns. The meeting between the Merrill Lynch representatives and Kokh took place at Turner’s request, after which Kokh said that Turner had made Gazprom a “concrete offer.” Kokh refused to give details of the offer, but declared himself “very satisfied” with it. According to a report published today, Kokh made no offers of any kind to Turner’s representatives (Vremya Novostei, February 16).

Earlier this week, the Financial Times quoted Kokh as saying Gazprom might be willing to allow the Turner-led consortium to acquire a stake in NTV as long as Gusinsky sharply reduced his own stake in the television company and refrained from forming an alliance with the outside investors in order to retain control–an apparent reference to Berezovsky. Kokh said he doubted that this could be achieved. Kokh said he would prefer an ownership scheme by which Gazprom and a Western group of investors would each hold 50 per cent minus one share in NTV, with the remaining two shares going to a liberal politician like Boris Nemtsov, head of the Union of Right-Wing Forces, as a way of ensuring the channel’s independence (Financial Times, February 14).