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Russian Bank gets prime real estate in lieu of debt-paper

Russia's state-controlled VTB bank (VTBR.MM: Quote, Profile, Research) has taken control of prestigious residential real estate near Moscow as repayment for a $2.4 billion loan to businessman Sergei Pugachev, Vedomosti business daily reported on Monday. Pugachev's company, OPK, had put 1,200 hectares as a collateral against the loan before the credit crunch and economic crisis badly hit the construction sector, bringing many developers and real estate firms to the brink of bankruptcy. VTB took over the plots at a value of $20,000 per 100 square metres, the price they were pledged for the loan, Vedomosti reported, citing a businessman close to Pugachev. Experts told the newspaper that Pugachev is lucky to get this price as the economic crisis has effectively frozen the real estate market and brought values down significantly. State-controlled VTB holds a large part of Russia's credit portfolio, some of it backed by real estate assets that could end up under its control if the financial crisis continues to strain its borrowers' solvency. Market research in Russia/