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. Last Updated: 07/27/2016

Business in Brief

Ruhrgas-Gazprom Deal



MOSCOW (MT) Germanys Ruhrgas has announced its intention to buy an additional 3 percent in gas monopoly Gazprom, boosting its stake in the company up to 8 percent, Itar-Tass reported Wednesday.

In case related agreements are reached with Moscow, Ruhrgas is ready to increase its stake in the company to up to 8 percent, said Burkhard Bergman, the newly appointed board chairman.

Ruhrgas owns 3.5 percent in Gazprom, plus 1.5 percent jointly with Gasexport. Its investments in the Russian company total 1.7 billion Deutsche marks ($740 million).

Bergman said Ruhrgas will increase its interest in Gazprom, but said the precise figures are still unclear.




UES Restructuring



MOSCOW (Reuters) A decision on how Russia will proceed with a controversial plan to reform national utility Unified Energy Systems is now up to President Vladimir Putin, the minister in charge of the plan said Wednesday.

Economic Development and Trade Minister German Gref said his ministry had submitted an amended version of the plan, sent back twice by the Cabinet for reworking, to the government Tuesday and any further amendments were up to Prime Minister Mikhail Kasyanov and Putin.

The final decision will be made by the president. The document will be reviewed by the prime minister and reported on to the president.

Gref said earlier this week that the document would be finalized within two or three weeks.




Sberbank Credit



MOSCOW (MT) Top savings bank Sberbank has a credit portfolio of $11 billion, Prime-Tass reported the banks president and chief executive officer, Andrei Kazmin, as saying.

Speaking at the Russia in the New Millennium conference on Monday, Kazmin said that loans to the real sector of the economy made up 93 percent of the portfolio. Long-term investment loans amounted to $2.5 billion.

Kazmin said most loans were issued for five years, and in 99 percent of cases the bank was using its own money. This is not a matter of some principles. We are ready to arrange syndicated loans, he said.

Cooperation with foreign banks is grossly impeded by discriminatory attitudes toward Russian partners in the international banking community, Kazmin said.

In actual fact, foreign partners put forward unrealistic demands. They kind of make all Russian companies responsible for the after effects of the 1998 crisis, he complained.

The discriminatory pressures make Russian banks unable to take anything but short-term loans for project financing. Lending institutions here have enough resources of their own to finance such projects, Kazmin said.




Sibir Planning ADRs



MOSCOW (Reuters) The head of regional airline Sibir was quoted Wednesday as saying his company would carry out an issue of American Depositary Receipts after the conclusion of a merger with Vnukovo airlines.

Vladislav Filyov also said he expects to remain head of Sibir after Vnukovo is integrated into it and that plans are already being drawn up for a possible merger with national flagship carrier Aeroflot.

Earlier this spring Sibir Russias top-rated regional airline and debt-laden Vnukovo agreed to a merger, following a failed attempt in 1999.

Siberia-based Sibir, which operates 29 planes, will take over all of Vnukovos routes, get a much-desired Moscow hub and benefit from Vnukovos fleet of 45 aircraft.

Filyov said an ADR program would be backed by a 25 percent stake that the state will hold in the merged airline in exchange for support for the deal and special considerations for Vnukovos mountain of debt, estimated at more than $20 million.

The government will get 25 percent of the unified company. An ADR issue is planned on this entire stake, he said, but did not give any other details.




LUKoil Bank Shares



MOSCOW (Vedomosti) No. 1 oil major LUKoil acquired a stake in Switzerlands Eurasco Bank from the National Reserve Bank, NRB president Alexander Lebedev said Tuesday.

Lebedev would not reveal the exact value of the transaction.

Analysts link the Eurasco purchase with the expansion of LUKoils business in Europe, saying the bank could be useful for servicing the offshore structures of LUKoil and its partners.

Eurasco Bank was established in 1997 from a financial company, Eurasco Zurich, established in the mid-1980s on the initiative of the Bank of Russia. In 1998, NRB bought the Central Banks 9 percent stake in Eurasco.

Eurasco has served as an organizer of syndicated loans for NRB and Alrosa worth some $53 million and $22.5 million, respectively.




Long-Distance Revamp



MOSCOW (MT) Rostelecom will lower tariffs by 23 percent for calls from Moscow to most European countries, the United States and Canada from 8 p.m. to 8 a.m. starting July 1, the long-distance monopoly announced Wednesday.

Tariffs to Ukraine and Belarus will rise 40 percent from 5 to 7 rubles. A call to Georgia, Armenia or Azerbaijan will cost 16 rubles at all times.

The tariff revamp was undertaken to meet changes in service costs, the company said, and was approved by the Anti-Monopoly Ministry on June 8.

To even out call charges for companies and enterprises funded by the government, the latter group will see a 20 percent hike for long-distance calls on working days from 8 a.m. to 8 p.m. and a 25 percent reduction on weekends, holidays and from 8 p.m. to 8 a.m. on working days.




Yukos Gets Support



VILNIUS, Lithuania (Reuters) Support for an equity for a crude supply deal giving Yukos a stake in Lithuanias Mazheikiu Nafta oil concern spread to the countrys three major parties Wednesday.

A welcome for the deal from Algirdas Brazauskas, leader of Lithuanias Social Democratic opposition, followed a similar statement by Lithuanias Parliament chairman, Arturas Paulauskas.

In the opinion of the Social Democrat leader, if the agreement is implemented, it will stabilize operations at Mazheikiu Nafta and ensure not only crude supplies but also a possibility to credit the companys reconstruction, the Social Democrat statement said.

Last week, U.S. Williams, which holds a 33 percent stake and operational control of Mazheikiu Nafta, signed a preliminary agreement to give Yukos a 26.85 percent equity stake for 300 million litas ($75 million). The deal is subject to approval by the government, which holds 58 percent in Mazheikiu.




Kazakh Eurobond



ALMATY, Kazakhstan (Reuters) Kazakhstans state oil company Kazakhoil plans to tap financial markets with a $100 million Eurobond this fall to help finance projects in the Central Asian state, a company official said Wednesday.

"We have [borrowing] plans for this fall. The bonds will have a maturity of five to seven years," the official said by telephone from the capital, Astana. "ABN-AMRO Bank has been chosen as the single lead manager of the issue."

The official gave no concrete time frame for the issue.

He said Kazakhoil, which is 100 percent state owned, planned to invest the proceeds from the issue in developing new fields, geological exploration and higher oil production and processing.

This will be Kazakhoils first borrowing on international markets. In June last year, the company successfully launched domestic bonds worth a total of $25 million.