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. Last Updated: 07/27/2016

Business in Brief

Reserve Fund Use



MOSCOW (Prime-Tass) -- The government said Wednesday that the Finance Ministry will be allowed to buy domestic and foreign state securities with funds from a special federal reserve.

All oil export revenues above the minimum level upon which the 2002 federal budget is based go into the reserve.

The ministry is only allowed to purchase securities that have the highest ratings from international rating agencies, the government said in a statement.

The government also will allow the Finance Ministry to sell state securities to cover a budget deficit if the domestic and foreign sources of revenues envisaged in the 2002 budget prove insufficient.

The ministry will have the right to determine time frames for buying and selling state securities at its own discretion.

The Finance Ministry also may use funds from the financial reserve for advance repayment of foreign debt following a corresponding decision from the government.




Sistema Cheery



MOSCOW (Prime-Tass) -- The total consolidated revenues of Sistema Telecom's subsidiaries are expected to rise 30 percent year on year to $1.88 billion in 2002, the holding's first vice president, Vasily Sidorov, said Wednesday.

The revenues of Sistema Telecom's subsidiaries were $1.435 billion last year, with No. 1 cellular operator Mobile TeleSystems accounting for 63 percent.

Sistema's earnings before interest, taxation, depreciation and amortization are expected to rise to $654.9 million this year, up from $625.6 million in 2001, Sidorov said.




TotalFinaElf Buys Field



MOSCOW (MT) -- The Anglo Siberian Oil Co. said Wednesday that it has sold a 52 percent stake in the Siberian Vankor oil field to France's TotalFinaElf for an initial $7 million, Associated France Presse reported.

TotalFinaElf may pay a further $20 million depending on the project's success.

Anglo Siberian, which currently owns 59 percent of the Vankor drilling license, said that TotalFinaElf will take over as operator of the field, which covers 1,625 square kilometers and is believed to hold 900 million barrels of oil and 74 billion cubic meters of natural gas.

TotalFinaElf is also to complete an appraisal of the Vankor field and along with its partners negotiate a production-sharing agreement with Russian authorities.

Anglo Siberian said TotalFinaElf has an option to take over as operator of the North Vankor oil field license as well and to buy 60 percent of Anglo Siberian's current 100 percent stake.




$800M in Cut Gems



MOSCOW (Prime-Tass) -- Domestic diamond cutters are expected to produce about $800 million worth of diamonds this year, the president of the Russian Diamond Cutters Association said Wednesday.

Last year, Russia is estimated to have produced about the same amount of cut diamonds.

Domestic cutters have the capacity to double cut-diamond output, said Yury Rebrik, who is also general director of the Smolensk-based Kristall Cutting Co. If output were doubled, that would match uncut-diamond monopoly Alrosa's output of $1.6 billion last year.

Kristall is expected to produce about $250 million worth of cut diamonds this year, up from about $220 million in 2001, said Rebrik, adding that uncut diamond suppliers include South African diamond giant De Beers.




St. Pete Gas Inquiry



MOSCOW (MT) -- Interior Minister Boris Gryzlov has sent a team of law enforcement officials to St. Petersburg to investigate corruption allegations in the city's gasoline business, the ministry's organized crime department said Wednesday.

The investigation was ordered after the Faeton gasoline company complained to both Gryzlov and the Prosecutor General's Office in April. Faeton accused the city's tax police of giving favors to the St. Petersburg Fuel Co., or PTK, Faeton chief Sergei Fetisov said.

He said the St. Petersburg administration heavily favors PTK and that several former city officials work at the company.




MGTS Plans GDRs



MOSCOW (MT) -- Moscow City Telephone Network, or MGTS, plans to issue at least $150 million worth of global depositary receipts in 2003, Vasily Sidorov, a member of the company's board of directors, said on Wednesday.

The issue was originally planned for this autumn.

MGTS has not yet chosen a stock exchange where the shares will be offered or a custodial bank, said Sidorov, adding the funds raised from the issue will be used to upgrade and digitalize MGTS's network.




Tax Shortfall



MOSCOW (Prime-Tass) -- The Tax Ministry is experiencing difficulties in meeting the May tax collection target, Tax Minister Gennady Bukayev said Wednesday.

The ministry is expected to transfer 120.8 billion rubles ($3.86 billion) in taxes to the federal budget this month, he told reporters.

The Tax Ministry collected 136.9 billion rubles of taxes in April, or 2.1 percent below the monthly target.




Reregistration Required



MOSCOW (Prime-Tass) -- All legal entities in Russia are required to reregister in the second half of 2002, Tax Minister Gennady Bukayev said Wednesday.

The step is aimed at creating a single nationwide registry of legal entities.

Prime Minister Mikhail Kasyanov issued a ruling earlier this month that placed the ministry in charge of registering.

All legal entities that fail to reregister will be forced to cease operations.




Big Paper Investment



HELSINKI, Finland (Reuters) -- Finnish-Swedish paper maker Stora Enso said Wednesday that it would invest a total of 103 million euros ($95.19 million) to boost board-making capacity in Russia and Germany.

Stora Enso will invest 33 million euros to build a new corrugated board mill in Arzamas, 500 kilometers east of Moscow, the company said. Construction will start in October and be completed in January 2004, Stora Enso said.

The new Arzamas mill will have annual capacity of 120 million square meters of corrugated board and boxes, or around 60,000 tons, which is equal to the capacity of Stora Enso's Balabanovo mill south of Moscow, a Stora Enso official said.

The Balabanovo mill, where production began in autumn 1998, is currently Stora Enso's biggest production operation in Russia.