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. Last Updated: 07/27/2016

Business in Brief

TNK War Chest?

MOSCOW (Reuters) -- No. 4 oil producer Tyumen Oil Co., or TNK, is building up a war chest to allow it to bid for state oil company Slavneft with the revival of a $500 million Eurobond issue, analysts said Tuesday.

Although TNK already has debts of $2.7 billion, a syndicate official said it had appointed Merrill Lynch, Schroder Salomon Smith Barney and Credit Suisse First Boston to revive the bond, which it issued but canceled in May this year.

The analysts said TNK was still in a weaker position than cash-rich rivals, but added that the move could make the competition for Slavneft very tough and drive up the sale price to an all-time high for a privatization.

The government decided this month to sell off Slavneft.

Oils Drag Stocks Down

MOSCOW (Reuters) -- Oil shares dragged the stock market lower Tuesday after a day of mild selling prompted by British oil giant BP's cut in its 2002 gas and oil output forecast.

The benchmark RTS index lost early gains to close 1.06 percent lower at 349.05 points, ending a two-day winning streak. Turnover was $13.15 million. The Reuters index of the ruble-traded MICEX fell 1.47 percent to 1,428.28 by 6:53 p.m. The Reuters MICEX composite eased 1.2 percent to 876.42.

Yukos was the top loser among oils, closing 2.7 percent off at $9 despite a 20 percent annual hike in its third-quarter production growth. Key rival LUKoil closed 1.43 percent lower at $15.90, a day after Standard & Poor's upgraded its rating outlook from stable to positive, citing the company's efforts to optimize costs.

Sibneft bucked the trend, closing 0.1 percent higher at $1.9990. Sibneft is due Wednesday to release its first interim accounts based on generally accepted accounting standards.

Tatneft Mum on Bond

MOSCOW (Reuters) -- No. 6 oil producer Tatneft kept silent Tuesday on whether it had redeemed its $300 million, five-year Eurobond, although sources close to the company said it had been paid off.

Tatneft and its financial adviser, Solid, declined to comment on the bond, issued in 1997 and due Oct. 29. The bond, which bears interest of 9 percent and a semi-annual coupon, was issued via Dresdner Kleinwort Wasserstein.

GDP Woes

MOSCOW (Prime-Tass) -- Insufficient investment in the economy is blocking faster growth in gross domestic product, Prime Minister Mikhail Kasyanov said Tuesday.

"The low level of investments is the major negative factor preventing the economy from growing faster than the current 4 percent," he said.

Investments rose only 2.5 percent in January to September compared with 7.5 percent growth over the same period in 2001.

The financial sector still does not provide for the flow of capital from the natural resources industries, which account for more than 50 percent of GDP, into the processing industries, Kasyanov said.

State to Control Alrosa?

MOSCOW (Vedomosti) -- The Audit Chamber said Monday that it has suggested that the federal government take full control over diamond monopoly Alrosa.

The chamber recently completed checking Alrosa's activities and uncovered violations omitted over redistribution of the company's shares.

Alrosa bought 1,621of its own shares in 1998 at a price of one-quarter or one-fifth of face value, the chamber said, and the purchase was made without the agreement of the company's supervisory board. The shares were sold to Alrosa's employees for a total of 3 billion rubles, or one-seventh of their face value.

The chamber said that those transactions damaged the interests of the federal government.

German Vodka Ruling

MOSCOW (MT) -- A Hamburg district court lifted an injunction Tuesday that forbade sales of Moskovskaya vodka in Germany, a source close to the case said.

The court ruled that Moskovskaya vodka, produced in Latvia by vodka exporters SPI Group, has the legal right to call itself "genuine Russian vodka," the source said. The bottle must state, however, that it is bottled in Latvia.

The court could not be reached for comment.


MOSCOW (Reuters) -- HSBC opened coverage of Unified Energy Systems at sell, citing risks stemming from a state-mandated reform of the electricity industry.

HSBC analyst Alexander Trazanov, in a report dated Monday, put a target price of 2.47 rubles ($0.077) on the local share, which finished down 0.97 percent at 0.1025 Tuesday.

Dell Upbeat on Sales

MOSCOW (Prime-Tass) -- Dell Computer Corp. hopes to double personal computer sales over the next two years, increasing its market share to between 10 percent and 12 percent from 6 percent, Alexander Shtalenkov, general director of the U.S. company's Russian division, said Tuesday.

Dell's annual sales in Russia currently stand at 15,000 items of various computer components, he said.

For the Record

No. 1 aluminum producer Russian Aluminum boosted production 0.8 percent year on year to 1.8517 million tons of primary aluminum in the first nine months of 2002, a senior company official said Tuesday. (Prime-Tass)

Passenger traffic on United Trans Air, formerly known as Tyumenaviatrans, rose 42.6 percent on the year in January-September to 1.234 million people, the company said Tuesday. (Prime-Tass)

The Moscow-based Ostankino brewery boosted beer output 38 percent to 4.3 million decaliters in the first nine months of 2002, the company said Tuesday. Output in money terms was up 79 percent year on year to 301.7 million rubles ($9.05 million). (Prime-Tass)