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. Last Updated: 07/27/2016

Business in Brief

Gazprom Plan on Way

ALMATY, Kazakhstan (Reuters) — A plan for the liberalization of trading in Gazprom shares will be available sometime in August, Deputy Prime Minister Viktor Khristenko said Friday.

President Vladimir Putin ordered the creation of a working group to consider liberalizing trade in Gazprom shares in April. It has finished its work, but the conclusions have not been made public.

"In the near future, documents on the nature and volume of the liberalization of Gazprom shares will be finally agreed upon and prepared," Khristenko said at a press conference in the Kazakh commercial capital, Almaty.

"I think it will appear as a fully-fledged project next month some time, and its implications can then be discussed," he said.

Mazheikiu Deal Backed

VILNIUS, Lithuania (Reuters) — The Lithuanian government said Friday it had approved a key Mazheikiu Nafta equity-for-crude deal and will back legislative amendments to allow Russian Yukos to take a stake in the concern.

"The government decided to support the long-term crude supply deal clinched by [Mazheikiu's operator] Williams and Yukos and will propose parliament to change legislation so that Yukos could take more than 24 percent in Mazheikiu," said Finance Minister Dalia Grybauskaite.

Under the deal, concluded last month with Mazheikiu's U.S. operator Williams, Yukos would inject $75 million into Mazheikiu and guarantee supply of 4.8 million tons of crude annually in return for 26.85 percent of the company. The state owns a 59 percent stake.

Parliament was to convene Monday to read the amendments, which currently restrict other shareholders than the government and Williams from owning more than 24 percent in Mazheikiu.

Mazheikiu has scheduled an Aug. 6 shareholders meeting to vote on a new share issue that would give Yukos an equity stake.

Vimpelcom Picks Alfa

MOSCOW (Reuters) — Shareholders in No. 2 cellular operator Vimpelcom approved an investment deal with Alfa Group and a share issue to facilitate the deal, Vimpelcom said Friday.

The company said in a statement that 99 percent of votes cast at an extraordinary general meeting were in favor of the measures.

Alfa agreed in May to invest $230 million in Vimpelcom's regional development project and take a 25 percent-plus-one-share stake in Vimpelcom.

It will also take a stake of up to 42 percent in Vimpelcom-R, Vimpelcom's regional arm."This gives the green light to all Alfa investments," said Valery Goldin, Vimpelcom vice president for investor relations.

Friday's extraordinary general meeting approved the first share issue of 5.15 million ordinary shares, the equivalent of 6.87 million American Depositary Shares.

Cabinet to Review UES

MOSCOW (Reuters) — The first stage of plans for a carve-up of national electricity monopoly Unified Energy Systems has reached the Cabinet, the ministry overseeing the massive scheme said Friday.

A spokesman for the Economic Development and Trade Ministry said it sent the government Thursday the outline of the first steps to be taken.

The restructuring would spin off regional power generators and create an electricity market but leave transmission in state hands to guarantee free grid access. Russia hopes the scheme will attract investment, but some investors have said the plan could lead to asset stripping.

The plan sent to the government sets out the new legislation that will be required to back up the principles laid out in a restructuring blueprint issued earlier this month; regulatory reform, including a reform of tariff-setting agencies; and the formation of a competitive electricity market.

Coke Russia to Be Sold

ATHENS, Greece (Reuters) — Greek bottler Coca-Cola HBC said Friday it had signed a letter of intent to buy the Coca-Cola Co.'s operations in Russia, Estonia, Latvia and Lithuania for around $200 million.

"The operations in these regions, which will be acquired by Coca-Cola HBC … will increase our consumers by 100 million, offering new important opportunities for future development," HBC said in a statement.

The letter is a nonbinding offer, and the deal is expected to be completed before the end of the year, the company said.

Brunswick Bullish

MOSCOW (Reuters) — Brunswick UBS Warburg said it raised its 2001 growth forecasts for Russia's economy Friday, saying domestic demand — fueled in part by higher wages — and increased investment were driving faster-than-expected growth.

"Above all, this reflects the current optimism at Russian corporates, which are generally planning major investment increases across the board," Brunswick said in a research note.

Brunswick increased its forecast for gross domestic product growth this year to 5.5 percent from 4 percent and raised its industrial output growth forecast to 6 percent from 5 percent.

The head of the State Statistics Committee last week said the economy had expanded by 5 percent in the first half of the year and put first-half industrial production growth at 5.5 percent.

Brunswick said the strong first-half performance pointed to a stronger performance for the year.

Austrian Builder Ready

VIENNA, Austria (Reuters) — Austrian building materials manufacturer Wienerberger Gruppe plans to move into the potentially lucrative markets of Ukraine and Russia over the next few years, Wienerberger CEO Wolfgang Reithofer said.

"We'll be there within five years," Reithofer said in an interview earlier this week, adding that the group would gradually test the Russian and Ukrainian markets by selling some of its products there.

Eventually, Wienerberger intends to either purchase some manufacturing facilities or build new plants in Russia and Ukraine, Reithofer said, but added it was too early to give details.

MTS Quits Frequencies

MOSCOW (Reuters) — No. 1 cellular operator Mobile TeleSystems has handed regulators some radio frequencies in the crowded airwaves, said an MTS spokeswoman Friday.

The Communications Ministry has been seeking new space in the 900 megahertz range as incoming competitor Sonic Duo tries to enter the market.

Sonic is a joint venture of Sonera of Finland, with 35 percent, and CT Mobile, which is jointly owned by a subsidiary of state telecoms holding Svyazinvest, Central Telegraph and an offshore firm.

Sonera has received a few megahertz, but says it needs more to launch a full-scale network on deadline by the end of the third quarter. A Sonic spokeswoman has said she expected regulators to solve the problem by Sonic's launch date.

Grain Forecast Up

MOSCOW (Reuters) — The Agriculture Ministry expects the grain harvest to exceed last year's 65.4 million tons despite hot weather in most producing regions, a senior ministry official said Friday.

"It is still very difficult to give concrete harvest figures, but I believe it will be better than last year," said Sergei Salenkov, head of the ministry's plant cultivation department.

Russia has sown 47.6 million hectares to grain this year, 1.7 million more than last year, but the heat has hurt crops.

Hungary Tariff Dispute

BUDAPEST, Hungary (Reuters) — The doubling of a Russian import tariff on some Hungarian food products was unexpected and could worsen economic ties clearly beneficial to the Russian side, a Hungarian Economics Ministry official said Friday.

"The measure is beyond comprehension both in substance and procedure," Peter Balas, deputy state secretary at the Economics Ministry told a news conference. "We are trying to avert a trade row … [but] such a step clearly escalates trade tensions."

A July 20 Russian government decree doubled to 30 percent the import duty on Hungarian frozen vegetables, rape seed and mustard seed oil, fruit and vegetable juices and some soups.

2 New Oil Terminals

MOSCOW (Reuters) — Transnefteproduct, which operates a quarter of the country's oil product pipelines, said Friday it would build two new terminals on the Black and Baltic seas to minimize its dependence on Baltic export outlets.

It plans within the next few years to build a 10-million-ton-a-year gas oil terminal and a 1,600-kilometer pipeline at the Black Sea port of Novorossiisk, Transnefteproduct president Sergei Maslov told the daily Nezavisimaya Gazeta.

He also said an 8-million-to-10-million-ton-a-year outlet would be built in Primorsk on the Gulf of Finland and linked to a 950-kilometer pipeline.

He estimated that investment needed for the two projects was $1.4 billion and said the company was in negotiations with LUKoil, Yukos, Sibneft and Slavneft to raise the funds.