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. Last Updated: 07/27/2016

Business in Brief

Minsk Ups Slavneft Bid

MINSK, Belarus (Reuters) -- Belarus said Wednesday it wanted at least $250 million for its 10.85 percent stake in oil firm Slavneft, $40 million more than the sole bidder, Sibneft, has offered.

Belarus is now tendering its almost 11 percent stake and Sibneft is the only prospective buyer so far, having put in a $210 million bid.

"If Russia says it wants to raise $1.7 billion for its stake, we can easily calculate how much the Belarus-owned stock is worth. It is about $250 million," Belarus Deputy Economy Minister Oleg Melnikov told reporters.

Russia will auction its 75 percent stake in Slavneft on Dec. 18, with a starting price set at $1.7 billion.

Cost of Doing Business

MOSCOW (Prime-Tass) -- Russian businesses together pay out a sum equal to half the country's gross domestic product in taxes, nontax payments and "expenses for overcoming administrative barriers," Economic Development and Trade Minister German Gref said Wednesday.

Taxes and other payments to governmental bodies make up 80 percent of that sum, while the remaining 10 percent is paid to overcome administrative barriers, Gref told a conference on currency regulation. "The tax burden and other business expenses remain extremely high," he said.

Gref also said currency and customs regulation is lagging. A bill on currency regulation is expected to be considered at a Cabinet meeting Thursday.

The new currency regulation bill contains important time frames for imposing restrictions, he said, but it may yet be amended and improved before it is submitted to the State Duma.

Illarionov: Free Forex

MOSCOW (Prime-Tass) -- Foreign exchange restrictions are not needed to prevent a currency crisis, presidential economic adviser Andrei Illarionov said Wednesday.

To prevent such a crisis, the authorities need to "secure the monetary base 100 percent," he said at a conference.

Illarionov also said he saw some contradictions in the new bill on currency regulation.

The bill stipulates using the Central Bank's hard currency and gold reserves as a resource to prevent significant fluctuations of the national currency, he said, but the reserves themselves are subject to fluctuations.

37% in Shadows

MOSCOW (Prime-Tass) -- The shadow economy is equal to approximately 37 percent of gross domestic product, Peter Westin, chief economist of the Aton brokerage, said in a report released Wednesday.

There are two main reasons for the movement of business from the official to the shadow economy: excessive regulation and a punitive and complicated taxation system, he said.

In his report Westin compares patterns of electricity consumption and freight transport with industrial output growth, which provide "perhaps the best illustration of a shift in economic activity out of the shadow."

Moscow Power Struggle

MOSCOW (MT) -- Moscow Mayor Yury Luzhkov has appointed former Mosenergo chief Alexander Remezov as general director of the city's rival power company, Interfax reported a source in City Hall as saying Wednesday.

Mosgorenergo was initially to be a buyer and reseller of electricity to consumers, but media have said that City Hall has plans for it to acquire its own generators, becoming a competitor to Mosenergo, a subsidiary of power monopoly Unified Energy Systems.

City Hall has said the creation of competition on Moscow's power market would lead to stabilization of electricity tariffs.

Remezov, a Luzhkov ally, was fired earlier this year and replaced by Yevgeny Yevstafeyev, UES chief Anatoly Chubais' ally, during a tug-of-war between City Hall and UES over control of Mosenergo.

DTV Vote Suspended

MOSCOW (MT) -- The Press Ministry on Wednesday was unable to decide who would receive a package of frequencies used by Russia's only fully foreign-controlled television channel.

A contest is being held for the frequencies after the ministry took them away from second-tier DTV, controlled by Sweden's Modern Times Group, earlier this year citing legal violations by the channel's management.

Press Minister Mikhail Lesin said that because of the importance of the vote, each of the nine members of the ministry's tender commission could vote for only one company. None of the six contestants secured a majority, Interfax reported. Commission members earlier could choose more than one contestant.

No date was announced for a new vote, but sources said it would be held in the spring.

DTV general director Mart Luik said the channel hopes to continue broadcasting. "Of course, we expected clarity and believed we could win," he said. "But if the decision is what it is, we will be getting ready for the runoff."

Lesin did not say whether DTV could continue broadcasting.

MTS's $60M in Belarus

MINSK, Belarus (Reuters) -- Mobile TeleSystems said Wednesday it would spend at least $60 million to boost coverage in Belarus next year, though the No. 1 cellphone company admitted that working in the former Soviet state posed some difficulties.

Mikhail Smirnov said he hoped to put in place 140 more base stations in Belarus, a country of 10 million people.

Smirnov told a conference in Minsk that he saw Belarus as a test site for developing projects for other countries.

"Our first international project is this one in Belarus," he said. "Now we are studying Moldova's market and looking at markets in Western Europe."

$15.7M Beer Bond

MOSCOW (Prime-Tass) -- Beer and soft drink major Ochakovo plans to issue domestic bonds worth 500 million rubles ($15.7 million) at the beginning of 2003, Igor Zubkov, head of the financial and economic department of the Central Federal District, said Wednesday.

Zubkov said the move is expected to allow Ochakovo to increase its output by 15 percent. The issue's maturity period is tentatively set at two years.

Yevrazholding Issue

MOSCOW (Prime-Tass) -- Yevrazholding's board of directors has decided to begin placing domestic bonds worth 1 billion rubles ($30 million) on Dec. 6, a source at the metals holding said Wednesday.

The bonds would be placed at a nominal price on the Russian Trading System and the Moscow Interbank Currency Exchange.

The bonds mature in three years and carry six semiannual coupons. The second coupon yields 16.5 percent, the third and fourth coupons yield 15 percent and the fifth and sixth coupons yield 12.5 percent.