Business in Brief
- By Unknown
- Oct. 23 2008 00:00
Warning on Bond Defaults
Russian companies may default on almost a third of ruble bonds as borrowing costs make it "impossible" to refinance, Bank of Moscow said.
One-third of ruble debt is "under severe distressed risk," said Denis Gayevsky, head of capital markets at Bank of Moscow. Companies may default on between 20 and 30 percent of the bonds, with retailers particularly vulnerable, he said. (Bloomberg)
Fund's Ruble-Asset Limit
The country limited the amount of ruble assets permitted for investment in the National Welfare Fund to 40 percent, the Finance Ministry said.
The state-run Development Bank, also known as Vneshekonombank, can manage all of the fund's ruble assets, the ministry said Tuesday. The fund stood at $48.7 billion on Oct. 1.
Up to 80 percent of the fund's foreign currency assets can be invested in bonds of foreign states, and up to 15 percent can be invested in bonds of government-linked agencies and central banks, it said. (Bloomberg)
VTB Plans More Loans
VTB plans to increase the size of its loan portfolio by 40 percent in 2008, a high-level source in the bank said Tuesday in embargoed comments.
"It's possible that the bank will see slowing growth rates in its profits and in lending volumes, but it does plan to see growth of 40 percent in its lending portfolio," the source said. (Reuters)
Sitronics Cuts Spending
Sitronics will cut its capital expenditure by 20 percent this year and close some of its business units, president Sergei Aslanyan said Wednesday.
He also said Sitronics has asked the Development Bank, or VEB, to help refinance a $125 million loan from Dresdner Bank. Sitronics took the loan in November 2007 at a rate of 9.25 percent. A source at Sitronics said the credit was taken for one year. (Reuters)
Sistema Reviewing Plans
Sistema is delaying all asset sales and acquisitions and reviewing investment plans because of the global credit crisis, owner Vladimir Yevtushenkov said, Interfax reported Wednesday.
Talks will continue on selling Sky Link and MTT and on buying mobile operator Smarts, he said. (Bloomberg)
S7 to Drop Russian Planes
S7 Airlines will retire all Russian-made aircraft in its fleet from Nov. 17 in favor of Boeing and Airbus planes, the company said in a statement, RIA-Novosti reported.
"All S7 passengers will receive the same comforts in flight" thanks to the retirement of the Russian planes, the statement said. S7 will cut flights to a few cities where foreign aircraft are not permitted to land, the report said. (MT)
For the Record
Norilsk Nickel said Wednesday that it produced 1,160 tons of cobalt in the first half of 2008 and has revived a plan to build a refinery to produce high-purity cobalt metal. (Reuters)
Sberbank received the first part of a subordinated loan from the central bank, CEO German Gref said, Interfax reported Wednesday. (Bloomberg)
Gazprom has delayed Gazprombank's IPO until at least 2010, Vedomosti reported. (Bloomberg)
VimpelCom CEO Alexander Izosimov will leave at the start of 2009, Interfax said Wednesday. (Bloomberg)