Menatep Buys Small Interest in MT Parent

Independent Media, parent company of The Moscow Times, has agreed to sell a small minority stake of its shares to the giant Russian financial conglomerate The Menatep Group, company officials said Monday.


An agreement in principle was signed in Amsterdam by both parties July 23, but neither shares nor money have changed hands yet, Independent Media CEO Derk Sauer said. The deal is expected to be finalized in the second week of August, he said, adding that neither side is prepared to disclose the dollar amount of the deal.


Independent Media co-founder Annemarie van Gaal said the deal would also bring non-financial benefits to the group. "This is a move that gives us some roots in Russia," she said.


Since its founding in 1992, Independent Media's fast-growing family of publications has come to include the semi-weekly English-language newspaper The St. Petersburg Times, the Russian-language business weekly Kapital and Russia Review, a twice-monthly magazine. It also publishes the Russian editions of the magazines Playboy, Cosmopolitan, Good Housekeeping and Harper's Bazaar and owns Skate, a financial information and Internet publishing company.


Sauer said both sides were determined that the sale of shares to Menatep will not affect the editorial integrity of Independent Media's publications. "This is one of the key issues in the deal," said Sauer. "Menatep has agreed not in any way to interfere in any editorial decision."


Analysts, however, said the deal could infringe on the paper's independence. "You will be on a leash," said Yasen Zasursky, dean of the journalism faculty at Moscow State University. "I hope it will be a to the principle of editorial integrity. "Independent Media is a successful company with an excellent track record. We see a great future for Independent Media," she said.


The Menatep Group includes Menatep Bank, Russia's 11th largest, and a wide range of holdings in Russian industrial companies.


It also has close ties to the Russian government.


During the controversial loans-for-shares privatization program late last year, Menatep won a controlling slice of Yukos, Russia's second-largest oil company, in what most observers regarded as a rigged auction.


Rivals have also charged that Menatep was a major beneficiary of flaws in Russia's system of privatization tender auctions. Rivals alleged that Menatep had received shares in many companies but failed to fulfill promises to make investments to the value of $1.1 billion.


Sauer said Menatep was a good partner. "Any large Russian company is going to be involved in things like loans-for-shares, and these types of transactions," he said. "But this isn't a reason for us not to go forward."


The Menatep Group's move to buy a stake in Independent Media is the first Russian shareholding in the company, but it marks a continuation of a trend toward growing integration between big business and media in Russia.


Last month Gazprom, Russia's gas monopolist, announced its plans to take a 30 percent stake in the NTV Independent Television broadcaster. The other main shareholder in NTV, the MOST group, whose main activities are in banking and real estate, also controls the Segodnya newspaper as well as the Itogi and Syem Dnei publications.


A spokesman for the Stolichny Savings Bank said the bank has a 5 percent stake in the ORT broadcaster, but added it has no interests in printed media. Reports in the Russian press had earlier linked Stolichny to the Commersant Daily newspaper.


THE MENATEP EMPIRE


Menatep Bank*


Total assets: 9.96 trillion rubles ($2.1 billion)


Ranking by assets: 11th among Russia's top banks


Net capital: 625 billion rubles ($131 million)


Alliance-Menatep investment bank


SKB-Bank (Yekaterinburg)


Rosprom


Under the umbrella of the Rosprom industrial holding company, controlled by the Menatep group, there are more than 30 companies organized into nine main departments.


?Yukos oil company, Russia's second-largest oil enterprise


?Textile industry (including AO Kontsern Rostekstil, AO Parizhskaya Kommuna, AO Sobitex)


?Food industry (including AO Koloss, AO Gerkules)


?Trading (including Menatep-Impex)


?Chemical industry


?Nonferrous metallurgy


?Light metals


?Mining chemicals


?Building materials


*As of Jan. 1, 1996


Source: Rating Center, Rosprom


The Moscow Times


The St. Petersburg Times


Russia Review


Kapital


Cosmopolitan


Playboy


Good Housekeeping


Harper's Bazaar


Vitrina


Capital Markets Russia


Skate's Blue Chips