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. Last Updated: 07/27/2016

Business in Brief

LUKoil 2000 Profits


Top oil producer LUKoil said Wednesday that it expected net profits to jump by 150 percent in full-year 2000 results, boosted by high international crude prices.

LUKoil vice president Leonid Fedun said in an interview that the results, in line with generally accepted accounting principles, were expected to be released in the middle of this year.

"We will publish international accounts regularly from now on," he said. LUKoil released long-promised 1998 and 1999 GAAP results on Tuesday, showing 1999 net profit of $1.06 billion.

Fedun said the company's plans to release GAAP results, which differ significantly from Russian accounting standards, would help to clear the path for new capital raising plans.

He added that LUKoil plans to place $200 million to $250 million of bonds that can be converted into 18 million shares from an issue planned this year.

WB Loans $85M

The Moscow Times

The World Bank approved an $85 million loan to improve heat-supply systems in Russian cites, Prime-Tass reported Wednesday.

The chief aim of the loan, to be repaid in 17 years with a five-year grace period, is to improve heating and hot water supplies while cutting municipal authorities' spending.

The loan will be disbursed first to Dubna, Mystishchi, Neryungri and Syzran, and later to Volgograd, Kazan, Kostroma and Tambov. Astrakhan and Vladikavkaz also asked to participate in the project.

$716M in Eurobonds


The city of Moscow is negotiating with foreign banks on issuing more than 800 million euros ($716 million) of Eurobonds this year to refinance maturing paper, the head of Moscow debt agency said Wednesday.

"If we do enter the international market under conditions of favorable trends, and after solving the problem inside the country, it will be June or September or October," Sergei Pakhomov said.

Moscow has to get permission from the Finance Ministry for the issue. Under Russian law, regions cannot issue Eurobonds ahead of the sovereign issuer.

"If an excessive price is to be paid for entering the international market, I want to say once again, that we shall not do this," Pakhomov said.

Pakhomov said he considered 9 percent to 9.5 percent yields acceptable for the new three- to five-year paper.

MGTS to Issue ADRs

The Moscow Times

Moscow City Telephone Network, or MGTS, wants to dip into international markets again by starting a Level 3 American Depositary Receipts program within a year, MGTS general director Vladimir Lagutin said this week.

Instead of issuing new equity, the company's shareholders — AFK Sistema and Svyazinvest, which have 55.6 percent and 28 percent, respectively — will likely sell shares, Interfax reported Lagutin as saying.

The company also announced that it paid off its maturing three-year $150 million Eurobond.