« Blasting From the Past: Ouroussoff on a Stand-alone Arena (Two Cheers Forward, And One Absolutely Cheerless Look Backward) | Main | Did KPMG consider the Kahr report? Maybe after the fact »

October 8, 2009

Prokhorov says his Nets investment is no money down, all borrowed funds

Atlantic Yards Report

There's a little bit lost in translation, but the headline is clear: Prokhorov Says Nets Will Make Profit in 2011-12, reports the Moscow Times.

Russia's richest man expressed no doubt that legal challenges would be overcome. But the big news is that Prokhorov revealed his game-changing (to Bruce Ratner) investment comes with little sacrifice.

The Moscow Times reports:
Prokhorov said that while Onexim Group has sufficient funds, it might raise the financing required from Western banks. The New York Times reported Sept. 25 that the agreement also envisioned future Nets losses, up to $60 million, that are expected to accumulate before the move to Brooklyn. Prokhorov also will be responsible for 80 percent of the team’s $207 million debt, the newspaper said, citing an unidentified executive involved in the transaction.

Prokhorov declined to provide details about the deal.

“We borrow the money and essentially give the loan to someone else,” Prokhorov said. “For that, we get the team and a share in the real estate project. To use simple language: the group doesn’t spend any of its own money.

“We are in the process of negotiating with Western banks,” Prokhorov added, declining to identify the banks or disclose the interest rate of the loans. “We will attract the full sum of the needed investment.”

link

Here's the original piece:

Moscow Times, Prokhorov Says Nets Will Make Profit in 2011-12

“We have carried out our due diligence. We understand the current state of the team, and we understand how it will be transformed into a successful and profitable undertaking when it moves to Brooklyn,” Prokhorov said in an interview.

“We understand the legal situation around the arena, our lawyers have attentively looked through all the documents. Under the agreements, we are protected from delays at the arena and expect that the management team will be able to deal with this,” he said.

NoLandGrab: The "management team" has been dealing with "this" for nearly six years now. We wouldn't have put our own money down, either.

Posted by eric at October 8, 2009 9:33 AM