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. Last Updated: 07/27/2016

Business in Brief

$6Bln Spy Network

MOSCOW (Vedomosti) -- The Austrian division of telecom giant Siemens and the Russian Development Bank are undertaking one of the most ambitious projects in Russian telecommunications history -- a $6 billion effort to build a national digital mobile radio communications system in five to 10 years.

The system will be based on Terrestrial Trunked Radio, or TERRA, a digital standard that the European Telecommunications Standards Institute promoted to replace outdated analog standards for mobile radio communications. Subscribers can use the system's antennae and base stations to develop their independent communications networks.

Among the targeted users are the military, security services, police, emergency services, fire departments and big corporations. According to the RDB's estimations, there will be 700,000 subscribers in the federal network by 2005 and 1.5 million users by 2010.

The RDB will be a financial consultant on the project.

$400M AvtoVAZ Car

MOSCOW (Prime-Tass) -- Leading automaker AvtoVAZ plans to invest $400 million to roll out its new VAZ-2151 rear-wheel-drive model, which is slated to start being assembled in 2006, the company's press service said Thursday.

The VAZ-2151 is an updated version of the VAZ-2105, 2104 and 2107 models with modifications in body, interior, engine and suspension constructions.

The plant plans to produce the VAZ-2151 estate car and hatchback vehicles.

AvtoVAZ plans to produce more than 753,000 cars this year, compared with 767,307 in 2001.

$291M Slavneft Buy

MOSCOW (Prime-Tass) -- Russian-Belarussian state oil company Slavneft paid $291 million for a 79.7 percent stake in regional oil company Varyeganneft, according to its 2001 financial report under international accounting standards, obtained by Prime-Tass Thursday.

The deal was made on April 1.

According to the report, Slavneft paid $177 million in cash and another $114 million in promissory notes maturing in the first quarter of 2003.

Slavneft's IAS 2001 net profit amounted to 3.654 billion rubles ($115.73 million).

Slavneft Rethink

MOSCOW (MT) -- New Slavneft CEO Yury Sukhanov plans to scrap his predecessor's oil projects in Sudan, Iran, Iraq and on the Caspian shelf as part of a massive overhaul of the Russian-Belarussian state company, Vedomosti reported Thursday.

In particular, the new management has studied the company's project in Sudan and found it unfeasible and high-risk, a spokesman for Slavneft told the paper.

In January, Slavneft formed a consortium with Sudanese state oil company Sudapet to develop an oil field in Khartoum and then pledged to raise $200 million for the project and invest about $15 million of its own funds.

In Iran, former Slavneft CEO Mikhail Gutseriyev signed a deal to develop the Zangi oil field, and a $6 million contract to provide oil field services for a group of oil wells, to build pipelines and to upgrade refining facilities. Gutseriyev pledged to annually invest up to $50 million in the Iranian oil industry, Vedomosti reported.

In Iraq, Gutseriyev signed a $52 million deal with the Iraqi Oil Ministry to develop an unspecified oil field containing reserves of 67 million tons.

Norilsk Swap Done

MOSCOW (Reuters) -- Mining and Metals Company (MCC) Norilsk Nickel said Thursday it had swapped 98.27 percent of its stock in the course of a complex share restructure started last year.

The restructure involved swapping on a par basis shares in parent company RAO Norilsk Nickel for MMC shares, which became the company's main quoted stock.

The latest phase of the restructuring, which lasted from Jan. 17 to July 17, involved swapping 5.81 million shares, or 2.3 percent of the total share capital, which had been left unswapped in the previous restructuring stages.

A Norilsk spokesman declined to comment on the fate of 1.73 percent of shares still left unswapped.

Steel Quotas for EU

MOSCOW (Prime-Tass) -- The Economic Development and Trade Ministry has started issuing licenses to steel manufacturers to export to the European Union as part of a new steel agreement with the EU, a ministry source said Thursday.

He said the ministry decided to start issuing licenses to enable domestic steel producers to meet contractual obligations and prevent potential losses due to delayed supplies.

The source noted, however, that the issue started before the Economic Development and Trade Ministry finalized the process of distributing EU steel quotas among domestic producers with the Russian Industry, Science and Technology Ministry.

Russia and the European Union signed a new three-year agreement on steel supplies on July 23, while former export licenses expired July 1.

Millhouse-Afanasy Deal

MOSCOW (Prime-Tass) -- U.K.-registered holding company Millhouse Capital, set up by owners of oil major Sibneft, said Wednesday it was behind the purchase of a 40 percent stake in Tver-Pivo, which owns 77 percent in brewer Afanasy-Pivo, Vedomosti reported Thursday.

Aton brokerage bought the shares from Afanasy-Pivo workers in late May, but declined to identify its client until Wednesday.

Aton paid a total of $1.35 million for the stake, which analysts said was some 90 percent lower than the prices paid for a comparable stake in small Russian brewers over the past year.

For the Record

The Central Bank's gold and foreign currency reserves rose $100 million to $42.6 billion for the week ending July 26, the bank said Thursday. (MT)

The government is planning to raise wages for public sector workers by a third next year, Labor Minister Alexander Pochinok said Thursday. He also said the draft 2003 budget calls for a 200 percent increase in wages to scientific researchers and doctors of sciences next year as well as doubling allowances for college students. (Prime-Tass)

Between 7 percent and 8 percent of the pharmaceutical market is counterfeit, equal to roughly $250 million a year, Itar-Tass quoted the health minister as saying Thursday. (MT)

The Moscow City Telephone Network, or MGTS, on Thursday said revenues rose to 4.87 billion rubles ($155 million) in the first six months of the year, up 35 percent year on year. The company said net profit under Russian accounting standards soared to 634 million rubles, compared with 17 million rubles in the same period last year. (MT)