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. Last Updated: 07/27/2016

Business in Brief

$50M Alfa Bank Loan

MOSCOW (Reuters) -- Alfa Bank, Russia's largest private bank, said Friday it had signed a $50 million one-year unsecured term syndicated loan to finance trade projects.

The facility was priced at 300 basis points over LIBOR and was arranged by ABN AMRO and ING Bank in London, which also act as book runners, the bank said in a statement. The term loan matures 364 days from the date of signing and can be extended for a further two consecutive 180-day periods.

"The new loan will be used to finance trade-related projects for our most important clients," Pavel Gorbatsevich, deputy chairman of the executive board of Alfa Bank, said in the statement.

UES Board Meets

MOSCOW (Prime-Tass) -- The board of directors of power monopoly Unified Energy Systems plans to consider an updated version of the company's dividend policy at its meeting in February, UES CEO Anatoly Chubais said during a conference call Friday.

UES management proposed to the board of directors allocating 2.629 billion rubles ($80 million) and 1.99 billion rubles to pay 2002 dividends on UES common and preferred shares, respectively.

Meanwhile, at its meeting Friday, the UES board decided to allow members of the company's executive board to hold executive positions in other companies, UES reported.

The board of directors also considered a report of the executive board's work in the fourth quarter of 2002 and approved a plan for the board's work for the first quarter of this year.

GAZ Gears Back Up

MOSCOW (MT) -- No. 2 carmaker Gorky Auto Plant, or GAZ, said it would resume production of sedans this week after its monthlong halt in response to low demand, Interfax reported Friday.

Nizhny Novgorod-based GAZ stopped its assembly lines at the end of last year to battle a glut in supply automakers blame on the high volume of imports of used foreign vehicles in 2002.

Analysts estimate 450,000 used foreign cars, which compete in the same price range as most Russian cars, were imported in early fall in anticipation of a tariff hike that took effect in October.

GAZ said on Friday it would launch production of a modernized version of the Volga 3110 in April and discontinue production of the current model. The modernized Volga will have new headlights and a stabilization system to improve the car's handling.

Used Car Tariff Hike?

MOSCOW (MT) -- Industry, Science and Technology Minister Ilya Klebanov sent proposals to the Economic Development and Trade Ministry last week to increase import duties from 25 percent to 35 percent on second-hand foreign made cars between three and seven years old, Vedomosti reported.

This reflects no change for companies that import; it's individuals who would have to pay an average of 2 1/2 times more. Duties are calculated based on an engine's horse-power.

Klebanov's ministry argues that raising tariff barriers will help to attract foreign automakers as it creates incentives to move production facilities to Russia.

Ford has built a plant outside St. Petersburg. General Motors has a joint venture in Tolyatti and BMW has an assembly facility in Kaliningrad.

IFC Invests in Bank

MOSCOW (MT) -- The International Finance Corp., part of the World Bank, has invested $10 million in Russky Standart bank's capital, Interfax reported Friday.

Dmitry Levin, the bank's chairman, said Russky Standart issued additional shares for the IFC last November, but did not say what stake the IFC had acquired, Interfax reported.

Levin said some of the money would go to charter capital. The bank hopes to raise its capital to $100 million by the end of this year.

Levin said he hoped to receive the money from the IFC before the end of February, Interfax reported.

Finns Up Energo Stake

HELSINKI, Finland (AP) -- Fortum, Finland's biggest energy company, said Friday it will take over Norway's second-biggest electricity producer, Hafslund, and increase its ownership in Lenenergo, the largest utility company in northwestern Russia.

The company also agreed to a swap of assets with Germany's E.ON worth 800 million euros ($856 million) and agreed to withdraw its complaint against E.ON's merger with Ruhrgas, Germany's biggest gas distributor.

In Russia, Espoo-based Fortum will boost its stake in Lenenergo by 9.3 percent, giving it a 15.7 percent stake in the company, which provides power to 1.3 million customers.

Fortum chief executive Mikael Lilius said the deals in Norway and Russia gave Fortum a "foothold … which is something we are very pleased about."

Lord of the Box Office

MOSCOW (MT) -- "The Lord of the Rings: The Two Towers" set a new Russian box office record for opening weekend ticket sales.

In the first four days after its Jan. 23 premiere, the three-hour screen version of J.R.R. Tolkien's classic fantasy grossed nearly 90 million rubles ($2.8 million) and was seen by nearly 750,000 people on 155 screens across the country, the Independent Film Distributors Alliance said Friday.

The record was previously held by "Die Another Day," the recent James Bond movie, which earned $2.5 million its opening weekend. "Men in Black II" is in third place, having pulled in $1.8 million the weekend it debuted.

Worldwide, "The Lord of the Rings: The Two Towers" has earned $733.5 million and is so far No. 12 on the list of all time blockbusters, according to figures.

Damages to Grain Crop

MOSCOW (Prime-Tass) -- Winter grain crops are expected to be damaged in at least 20 percent of the planted area by severe winter conditions, Agriculture Minister Alexei Gordeyev said Friday.

Moreover, the planted area was 2 million hectares lower than a year before and these factors are expected to cause a drop in the 2003 harvest, Gordeyev said, putting the next harvest at about 70 million metric tons, down from an expected 86.5 million tons in 2002.

Winter grains have higher yields than spring varieties and usually account for about 40 percent of Russia's grain harvest, mainly in superior milling varieties.

A rise in the winter planted area for the 2002 harvest allowed farmers to offset some weather problems last summer, and the grain harvest has been estimated at 86.5 million tons, up from 85.2 million tons in 2001.

2,000 Trucks for Iraq

MOSCOW (Prime-Tass) -- The Urals Automobile Plant plans to supply 2,000 heavy trucks to Iraq, the press service of RusPromAvto, the holding that controls the Urals plant, said Friday.

The plant produces all-terrain trucks and is the main supplier of heavy-duty vehicles to the Russian army.

Car and truck major Gorky Auto Plant, also a RusPromAvto subsidiary, plans to export 5,000 GAZ-3110 Volga passenger cars to Iraq in 2003, according to a deal signed in fall 2002.

The press service added that "all these vehicles are for peacetime use only and are in line with the sanctions against Iraq."

Aeroflot, Unions Agree

MOSCOW (Prime-Tass) -- The leaders of Aeroflot's trade unions and company officials will settle their dispute through negotiations, the representatives of the two parties said Friday.

According to the president of Aeroflot's trade union association, Viktor Kleshenkov, the company's top managers received letters from the trade unions with a request to appoint representatives for talks.

"If this is done, I will propose that the trade unions should remove the possibility of a strike," he said.

Aeroflot's management is also ready to settle the dispute through negotiations, the company's public relations department said.

The trade unions are demanding, among other things, an agreement on the salary system and on a method of counting working hours.

Earlier it was announced that Aeroflot CEO Valery Okulov had ordered that all disagreements be resolved by March 1.

Foreign Capital Drops

MOSCOW (MT) -- Industry, Science and Technology Minister Ilya Klebanov said last week that foreign capital in Russia's economy totaled $39.8 billion at the end of the third quarter last year.

This, he said, is $15 billion less than it had been one year earlier. He said that direct investment made up 50 percent of the capital, while credits amounted to 45 percent and portfolio investments were at 4 percent.

Klebanov added that he hoped to see foreign investors increase their presence in the country's economy, particularly through venture investments.

Post Office Hikes Prices

MOSCOW (MT) -- The Communications Ministry on Friday increased tariffs for postal services from 3.25 rubles (10 cents) to 3.7 rubles for unregistered letters and from 2.45 rubles to 2.75 rubles for unregistered postcards.

Special increased tariffs were introduced in some 30 regions of the country where they exceed regular tariffs by 10 percent to 100 percent.