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. Last Updated: 07/27/2016

Business in Brief

Alfa Makes Rich Richer

The Moscow Times

Billionaire fugitive Marc Rich, whose last-minute pardon by outgoing U.S. President Bill Clinton is still causing waves in Washington, is set to receive $100 million from Russian conglomerate Alfa Group when it completes its purchase of his trading company, the Financial Times reported.

Alfa chairman Mikhail Fridman told the London-based newspaper Monday that he was shocked by the controversy over the pardon and said that he was determined to carry through with the deal.

Rich would get the $100 million personally due to the fact that he owns 100 percent of the company, the newspaper reported.

"From a business point of view, this deal is profitable. From a public relations point of view, it is not very useful. But I don't think we should stop the deal," it quoted Fridman as saying.

MTS Buys Telecom XXI

The Moscow Times

Mobile TeleSystems spiced up the release of its 2000 financial results by announcing Tuesday that the company is preparing to acquire St. Petersburg GSM cellular operator Telecom XXI.

The purchase, if approved by the Anti-Monopoly Ministry, would give MTS a much-coveted GSM 900-1800 license for the Northwest region, which is currently dominated by Telecominvest's Northwest-GSM.

MTS general director Mikhail Smirnov said that MTS hoped to win 35 percent of the St. Petersburg market in the foreseeable future, Reuters reported.

St. Petersburg is Russia's second-largest cellular market after Moscow, but analysts say mass demand is far from satisfied.

MTS announced that its 2000 net profit rose to $90.05 million from $85.66 million in 1999, but figures for the fourth quarter were down.

A news release said fourth-quarter net profit fell to $14.17 million from $23.05 million. The results were calculated under generally accepted accounting principles.

Full-year EBITDA (earnings before interest, tax, depreciation and amortization) rose to $232.60 million from $169.26 million in 1999, while the fourth-quarter figure rose to $61.16 million from $45.33 million, Interfax reported.

The company said its subscriber numbers rose to about 1.2 million at the end of 2000 from 370,000 at the end of 1999.

Gazprom Audit Woes

The Moscow Times

Gazprom's board of directors Tuesday rejected an offer made by minority shareholders to have the gas monopoly undergo an independent audit.

As was earlier decided, the board will stick to the multinational auditing firm PricewaterhouseCoopers, which will investigate several of Gazprom's commercial dealings, the board said in a statement issued after the meeting.

One of the issues to be audited is Gazprom's relationship with Itera, a Jacksonville, Florida-registered company that has seen its gas production grow as Gazprom's falls.

The controversy surrounding Gazprom and Itera began last year when Gazprom board member Boris Fyodorov, who represents minority shareholders, accused the gas giant of transferring valuable assets to Itera.

In January, Fyodorov asked Deloitte & Touche to conduct an independent audit of Gazprom's relationship with Itera and other subsidiaries on behalf of investors.

Tatneft Rating Up

The Moscow Times

International rating agency Fitch IBCA upgraded the long-term and short-term debt rating of oil major Tatneft and its London-based affiliate, Tatneft Finance PLC, from double C to B minus and from C to B, respectively.

"The upgrade reflects the successful restructuring of Tatneft's secured debt facilities and improvement in the company's financial position," said a statement issued by Fitch on Monday. Fitch's rating scale goes from A to E in descending order.

Debt in the amount of $354 million secured by Tatneft's export revenues was rescheduled late last year. Holders of this debt are in a preferential position compared with those who hold a $300 million unsecured bond issued by Tatneft Finance.

Seafood Earns $15M

The Moscow Times

Russia earned some 80 percent more than the starting prices Tuesday for quotas to catch seafood including crabs, crayfish, scallops and cod in the seas of the Russian Far East at the Central Russian Universal Exchange, Interfax reported.

A total of 434.87 million rubles ($15.2 million) was paid for 187 lots of seafood.

The first lot was the dearest. A quota to catch 14 tons of prickly crab went for 45 times more than the starting price: Instead of 12,600 rubles, the quota was sold for 570,000 rubles.

No foreign fishing companies were allowed at the auction. Nor will they be admitted to the next two auctions, scheduled for Wednesday and Thursday at the same exchange.