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. Last Updated: 07/27/2016

Business in Brief

Polar Routes Open

The Associated Press

After years of negotiations, Russia on Thursday opened four new polar air routes for commercial airlines, a move that could trim two hours off some flights from North America to Asia and save airlines millions of dollars.

The new routes allow nonstop flights between such cities as Vancouver, Canada, and Beijing, or New York and Bangkok, Thailand, for long-haul jets.

LUKoil Delays Again

The Moscow Times

The nation’s No. 1 oil company failed to release its accounts — audited according to Western standards — by the end of January as had been expected and said Thursday they would not be issued before March.

According to a November press release, LUKoil promised to release its 1998 and 1999 accounts, revised according to generally accepted accounting principles, by the end of January. Officials attributed the delay to issues that need to be reconciliated with the auditor.

In reaction to the delay, many brokerages downgraded LUKoil’s short-term rating. "We believe that management is making a big mistake in underestimating the importance of U.S. GAAP audited accounts," Troika Dialog said Wednesday in a research note.

"In doing so, management brings the company down to the general level of largely inadequate corporate governance in Russia."

$102M for Investment


A Moscow subsidiary of Baring Private Equity Partners has raised $102 million from U.S. and European investors to launch what it said was Russia’s first direct investment fund since its 1998 financial crisis.

"The committed capital of the new Baring Vostok Private Equity Fund totaled $102 million at the end of January 2001," Baring Vostok Capital Partners said in a statement Thursday.

The fund will invest in oil and gas, telecoms, forestry, consumer products and information technology enterprises in Russia and Ukraine.

Firms Agree on Onako


Oil majors Sibneft and Tyumen Oil Co., or TNK, have agreed that Sibneft will hold a 33 percent stake and TNK a 67 percent stake in a unified company to be formed from the Orenburg region’s Onako oil holding, Prime-Tass reported Thursday, citing unnamed sources.

Sibneft unofficially confirmed the report but declined to elaborate, the news agency reported.

Algida Production Halt

The Moscow Times

British-Dutch corporation Unilever will cease making popsicles and ice-cream bars in Russia, Vedomosti reported Thursday.

A corporate relations representative at Unilever-CIS, Yulia Goshko, said ice-cream production was not the main business of Unilever in Russia and the company had merely been conducting "research of the Russian ice-cream market."

According to market researcher Gallup AdFact, Unilever spent nearly $6.2 million from 1999 to 2000 to advertise its Algida label.

MDM Buys Into Coal

The Moscow Times

MDM Group has bought into Russia’s third-largest coal producer, VostsibUgol, the company reported Thursday.

VostsibUgol has been dominated by Promtorgbank, which managed a 41.49 percent stake on behalf of the federal government. But the Energy Ministry canceled the contract with Promtorgbank in May last year, after which the government set Dec. 5 as an auction date for its stake in the company.