Russian tycoon admits his company

MOSCOW — A Russian construction magnate who made headlines for saying that anyone who failed to become a billionaire in Russia is a loser has admitted that his once titanic company is going under.

Mirax Group CEO Sergei Polonsky, who was worth $1.2 billion in 2008 according to Forbes magazine, posted a letter on his blog late Thursday saying that the company would stop all construction.

The post comes after a court last week froze Mirax Group’s assets for its failure to repay a $242 million loan, putting the brakes on such high-profile Mirax projects as the Federation Tower, an ambitious Moscow spire planned for completion in 2010.

Polonsky famously declared in 2008 that “those who don’t have a billion, can go to hell.” In the fall, he urged reporters not to blow the economic downturn out of proportion.

Now, he acknowledges things have changed.

“During the past year, we haven’t managed to secure a single loan for construction, and in the past month we haven’t sold a single square meter of housing or collected any installment payments for the real estate we’ve already sold,” he wrote.

Mirax Group is “struggling with the storming seas of the economic crisis” and may not survive, he wrote. “If we are destined to perish, we’ll do it with our heads up high”.

The Moscow Arbitration Court froze several assets of Mirax Group for the company’s failure to repay a $242 million loan to Alfa Bank. The court has yet to hand down its ruling on the case, but the move means that Mirax may lose its most valuable assets, including the Federation Tower, if Alfa Bank proves that the company is insolvent.

Polonsky accused Alfa Group, the parent company of Alfa Bank, on Friday of “unfriendly actions” and said that Mirax had “underestimated the complexity of talks . . . in the debt restructuring with Alfa Group”.

Polonsky expressed hope that even if his company changes hands, its new owners will be able to meet its obligations to creditors and investors.

As a private company, Mirax is not obliged to disclose its financial details, but its debt is estimated at $600-700 million by analysts.

Idle cranes at construction sites in the business district have become a symbol of Russia’s economic crisis, its first after a decade of oil-fueled economic growth.