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. Last Updated: 07/27/2016

Business in Brief

Norilsk ADR Issue

MOSCOW (Reuters) — Metals giant Norilsk Nickel said Wednesday an equity restructuring it plans to execute has already won some foreign investors’ support despite initial worries.

The restructuring will see Norilsk shares swapped for shares in its core unit, Mining and Metals Co. Norilsk Nickel, by the end of 2001 with the aim of creating a more efficient corporate and financial structure.

Company officials have been on the road over the past two weeks, presenting its launch of Level One American Depositary Receipts into which foreign investors can convert shares to make their participation in the restructuring easier.

Norilsk deputy CEO Alexei Zhdanov said that around 4 million ADRs out of the planned 50 million were already being traded over the counter. Foreign investors own around 18 percent of Norilsk.

"The results have somehow surpassed our expectations," Zhdanov told a news conference.

Norilsk is also mulling plans to obtain a secondary listing for ADRs on the Frankfurt Stock Exchange, the NEWEX Exchange in Vienna and, possibly, the London Stock Exchange.

SUAL Eyes Smelter

MOSCOW (Vedomosti) — No. 2 primary aluminum producer Siberian Aluminum Holding said Wednesday it was holding talks with another smelter in southern Russia.

SUAL was in purchase talks with the owners of the Volgograd smelter, but a spokesman said discussions had not touched on mergers yet.

"We are in talks with Volgograd, but we are discussing the details of cooperation. So far there has been no discussion of mergers or acquisitions," said spokesman Alexei Goncharov.

"SUAL is interested in a merger with Volgograd, but so far this issue has not been discussed," he added.

Volgograd produces around 120,000 tons of primary aluminum per year, but has the potential to produce up to 140,000 tons.

SUAL produced 594,000 tons of aluminum in 2000 and plans to increase output to 620,000 tons this year. It produced 1.65 million tons of alumina last year.

Sibneft Drilling Deal

MOSCOW (Reuters) — Sibneft said Wednesday it had signed a 30 million euro ($25.42 million) deal with Germany’s Deutag, part of Preussag AG, to drill 10 horizontal wells in one of its oil fields in its core western Siberian base.

Russia’s sixth-largest oil company said in a statement that the first well was due to be spudded in the summer of next year, with the remainder to be drilled over a two-year period. The drilling will take place in the Romanovskoye field, part of the core Noyabrsk base.

The company said the deal came after a $60 million contract earlier this year with Pride Forasol, part of Pride International.

AvtoVAZ: $123M Profit

MOSCOW (Reuters) — Top carmaker AvtoVAZ more than tripled net profits to 3.6 billion rubles ($123.4 million) in the first half of 2001 from 1.1 billion rubles in 2000, an AvtoVAZ manager was quoted as saying Wednesday.

Alexei Nikolayev, the company’s general director, was quoted by Interfax as telling a news conference that sales grew to 49.9 billion rubles from 35.6 billion rubles in the first half of last year.

AvtoVAZ produced 375,900 cars in the first six months of 2001 compared with 344,200 cars in the same period a year ago. The company posted a net loss of some 3.8 billion rubles in 2000.

AvtoVAZ last week signed a deal with General Motors and the European Bank for Reconstruction and Development to invest $332 million in a joint venture to produce an upgraded version of AvtoVAZ’s offroad Niva vehicle.

Microsoft Loses Suit

MOSCOW (MT) — The Moscow arbitration court’s appellate court Tuesday ruled against U.S. software giant Microsoft in its bid to overturn an April 11 ruling that found the Business Development Bank had used Microsoft software legally, Interfax reported.

A Microsoft official told reporters that the company would probably appeal the decision.

Microsoft filed the suit after two raids on BRP by the Interior Ministry and the economic crime department of the Moscow police found that the bank was using unlicensed software products developed by the U.S. company.

New S Account Rules

MOSCOW (Reuters) — The Central Bank moved Wednesday to liberalize ways for foreigners to repatriate proceeds from restructured GKO ruble debt.

The Central Bank’s weekly bulletin published a set of rules expanding the operations with so-called S accounts.

According to market estimates, foreign investors hold from $1 billion to $4 billion in rubles gained from a restructure of GKO restructure treasury bills after the 1998 financial crisis.

The new rules let foreigners invest GKO funds in industry, transfer funds in the accounts to each other, and repatriate proceeds from coupon and dividend payments without restriction.