Putin offers to take vast Sochi hotel from oligarch

AP News
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Posted: Feb 09, 2015 6:06 AM
Putin offers to take vast Sochi hotel from oligarch

MOSCOW (AP) — Russian President Vladimir Putin offered late Sunday to take on a vast hotel in Sochi, home to the 2014 Winter Games, from an oligarch and compensate him for the construction costs.

An Associated Press investigation last week revealed that at least two major Sochi investors, including tycoon Viktor Vekselberg, were quietly dumping their toxic assets on the state, forcing taxpayers to pick up the bill. For the oligarchs, it's a way to recoup billions of dollars as they struggle in an economy battered by plunging oil prices and Western sanctions.

Vekselberg invested half a billion dollars to build two hotels next to the Olympic Park.

With the Sochi hotel market saturated, his company decided to hand over one hotel to the state, which amounts to dumping the $450 million loan it took out from a state bank as well.

The deal was not officially announced until Putin visited Sochi to celebrate the first anniversary of the 2014 Olympics.

Putin, who chaired a meeting at the hotel about the future of a children sports camp nearby, said it would be a good idea if the children could make use of it.

"I suggest giving away this to the children," he said, according to a Kremlin transcript. "(We should) pay them all they have spent on construction to compensate for 'historic' losses but no profit."

The 2014 Winter Games hosted in the Black Sea resort of Sochi cost $51 billion and became known as the most expensive Olympics in history.