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. Last Updated: 07/27/2016

BUSINESS WEEK IN REVIEW: March 1 to 7




Sheremetyevo Revamp


Defying a national financial crisis that has scared off many foreign investors, the Swedish construction company Skanska AB announced its participation in a $1 billion joint venture to renovate and expand Sheremetyevo, Moscow's international airport. Skanska BOT, the group's unit for investment in infrastructure projects, has pledged to line up financing for the ambitious remake of the airport, which would see the construction of new passenger terminals and the renovation and expansion of existing airport buildings. Work is to begin this year and continue for a decade. Following the construction Sheremetyevo International Airport will have a new $200 million passenger terminal, and capacity at the airport is expected to increase from 11 million passengers per year to 30 million.


Banks Consider Merger


The Bank of Moscow said it is considering a merger with MOST-Bank, a move analysts said would boost Moscow Mayor Yury Luzhkov's powers by giving him a toehold in the giant Media-MOST empire. The Moscow government, which holds a 52.7 percent stake in the Bank of Moscow, has greeted the proposal positively, the bank said. MOST-Bank declined comment other than to confirm that talks are under way. Analysts said that from a banking viewpoint acquiring debt-ridden MOST-Bank is illogical. But bailing out the troubled bank would give Luzhkov, who is also a presidential hopeful, a say in the activities of Media-MOST. Among the holding company's assets are the newspaper Segodnya, NTV television, a satellite network and a movie studio.


GKO Holders Stay Together


A group of 19 banks, split over how to deal with Russia's debt default, has agreed to stay together in seeking better terms from Moscow after holding a special meeting. A source close to the talks said Deutsche Bank, hitherto the group's chair but under pressure to quit, would remain a member. Deutsche came under attack after it secured its own deal in February to restructure some debt. The talks were called after Deutsche and Chase Manhattan Bank agreed to restructure some GKO treasury bills and OFZ bonds on terms opposed by many other creditors.


No Sidanko Receiver Ruling


In a move that shareholder BP Amoco called "extremely disappoint[ing]," a Moscow regional arbitration court has postponed until May 18 a hearing on the appointment of an outside manager for troubled Russian oil company Sidanko. The bankruptcy process in Russia is notorious for its lack of transparency and is often seen as little better than an opportunity for asset stripping. The creditors' nomination of Sergei Sereda, director of the corporate recovery department at Arthur Andersen's Moscow office, had been hailed as a step toward true independent management. Sereda's nomination, which was put forward at a creditors' meeting Feb. 19, only awaited approval by the arbitration court. The court granted the delay at the request of the temporary external manager, Sergei Kitin.


Soyuz Nears Loan


Soyuz Group, formerly known as SBS-Agro bank, said it will soon receive the final 2.5 billion ruble tranche of a 7.5 billion ruble ($350 million) Central Bank stabilization loan. The tranche, expected to arrive this week, will be used to revive operations at several of the bank's branches still experiencing crisis-related problems, including some in Moscow. The 7.5 billion ruble loan comes on top of several previous Central Bank loans to Soyuz in the days when it was known as SBS-Agro. The first of those loans was issued before the August crisis, and Soyuz waited a long time for the second 2.5 billion ruble tranche. The Central Bank disbursed up to 20 billion rubles to bail out big banks hit by the crisis, and up to half of it went to Soyuz, analysts said.


RJR Set to Sell Plants


Tobacco and food products giant RJR Nabisco Holdings Corp. appears to be gearing up to sell its three Russian cigarette plants and best-selling domestic brands Pyotr I and Magna as part of a global restructuring plan. Tobacco leader Philip Morris is tipped by analysts as the likely suitor. The RJR revamp, which has the company spinning off its $6 billion international tobacco operations by March 12, was provoked in part by disappointing financial results in Russia and Central Asia. RJR, which produces the popular Winston and Camel international brands in addition to several Russian brands, is one of the largest investors in Russia having pumped $400 million into the country since 1992.


Dunkin' Donuts Pulls Out


Dunkin' Donuts, the American doughnut chain, has shut down its operation in Russia after seeing sales cut in half in the wake of the ruble devaluation and banking collapse. The company closed its four directly owned Dunkin' Donuts shops in Moscow and two in the Moscow region.