Forest City turns to — surprise — Prokhorov to offload Nets, Barclays Center stake

Deal would see oligarch pay little beyond $31M owed by real estate firm
September 04, 2015 11:00AM

Forest City Enterprises reportedly found a buyer to offload its stake in the NBA’s Brooklyn Nets and the Barclays Center in Prospect Heights – and unsurprisingly, it’s none other than Russian oligarch and Nets majority owner Mikhail Prokhorov.

Prokhorov would consolidate sole ownership of both the team and the arena by acquiring Forest City’s 55 percent stake in the Barclays Center and 20 percent interest in the Nets.

The deal would see Prokhorov pay little beyond forgiving Forest City of the roughly $31 million it owes him for covering the team’s losses over the past NBA seasons, according to the New York Post. Prokhorov’s Onexim Group recently extended for the second time a deadline for Forest City to repay the money it owes the oligarch.

The extension gave the real estate firm until Sept. 8 to either pay Onexim the $25 million it owed for the past two years – as well as $6 million to cover its share of the Nets’ losses for the upcoming season — or see its ownership interest in the team diluted from 20 percent to 8 percent.

While Forest City sought to avoid the dilution, as it would have hurt the value of its stake in the team, the firm failed to find an outside buyer and has now turned to Prokhorov to offload its stake in both the team and the Barclays Center.

The deal is part of Forest City’s increased focus on core real estate assets as the company prepares for its conversion into a real estate investment trust at the start of next year. [NYP]Rey Mashayekhi