Russian billionaire Mikhail Prokhorov is nearing a deal to buy all of the Barclays Center and the Brooklyn Nets from Bruce Ratner’s Forest City Enterprises, The Post has learned.
Prokhorov has been in talks to buy the 55 percent of the arena and 20 percent of the NBA team he does not already own. Under the deal being discussed, he would kick in little cash beyond forgiving the roughly $31 million Forest City owes him to cover team losses, according to two sources familiar with the situation.
Onexim Group, Prokhorov’s investment vehicle, earlier extended until Sept. 8 a deadline for when Forest City needs to pony up about $6 million to cover its share of the Nets’ losses for the 2015-16 season. That’s on top of the $25 million it owes for past seasons.
Selling the sports interests would make it easier for developer Forest City to pull off a complicated conversion to a tax-advantaged real estate investment trust, which would help boost its share price.
“People can’t wait for them to sell these assets so they can focus on real estate development,” said one analyst who follows the company.
A deal with Prokhorov would come after Forest City tried and failed to find an outside buyer in an auction.
Prokhorov didn’t make that sale process any easier by withholding financial information, according to sources close to the process.
Forest City could end up pocketing less than $100 million on the sale of the team and the arena to Prokhorov, according to one analyst.
The team is valued at an estimated $700 million, according to the analyst who follows Forest City. After subtracting $210 million of debt, the franchise has an equity value of $490 million.
Forest City’s 20 percent would be worth around $100 million, and it shares 38 percent of its Barclays and Nets stake with partners. So, minus its $31 million in team losses, the firm and its partners would realize a gain of less than $70 million.
When Prokhorov bought control of the Nets in 2010, it was also for a disappointing price of about $200 million following a lukewarm auction.
Meanwhile, Barclays Center is projected to generate $55 million in annual operating income but has debt of $640 million. That leaves little equity value even at a sale price of 10 times annual operating income.
Both Onexim and Barclays declined comment, while Forest City did not return calls requesting comment.