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. Last Updated: 07/27/2016

Business in Brief

Smolmyaso Ruling

MOSCOW (MT) -- The Smolensk Arbitration Court on Wednesday annulled a Jan. 15 decision by an extraordinary shareholders meeting at the Smolmyaso meat processing plant that replaced managers allied to Vladimir Potanin's Agros group with those affiliated to Rusagrocapital.

On Tuesday, Agros convened an extraordinary shareholders meeting that appointed a loyal board as well as its representative, Alexander Tsybulin, as general director.

A lawyer for Rusagrocapital said that neither the court decision nor the meeting were lawful, since Rusagrocapital's representatives did not attend the event.

Agros and Rusagrocapital have been struggling for control of Smolmyaso since Agros acquired a 57 percent stake last fall. Earlier this month, the two sides agreed on a so-called Texas shoot out auction whereby the party that implies the highest value for the company in its bid for the other's stake wins.

Agros had agreed to an offer of $5 million for its share, but Rusagrocapital pulled out when a court froze 10 percent of Agros' shares after the legitimacy of their purchase was challenged. The arrest was lifted March 21.

Copyright Bill Passes

MOSCOW (Prime-Tass) -- The Federation Council approved a bill Wednesday that strengthens punishment for copyright infringements.

Violations of the copyright law will be punished by arrest, fines and imprisonment of up to two years or up to five years if the damage exceeds the limit of 500 minimum wages. The minimum wage is 450 rubles ($14. 34) a month.

On Dec. 30, Prime Minister Mikhail Kasyanov signed an order setting up a governmental commission to crack down on violations of intellectual property rights.

The commission is responsible for working out measures to transfer sales of audio and video product from the black and gray markets to specialized stores, to amend the copyright law and to create security marks for audio and video products.

It is estimated that 50 percent of all audio and video products sold in Russia are either pirated or brought in illegally.

Gazprom Eyes VNG

MOSCOW (Reuters) -- Gazprom said Wednesday it might team up with Germany's Wintershall to buy a stake in Eastern German gas distributor VNG to boost profitability by accessing the retail market directly.

Gazprom said it could join forces with Wintershall, part of the BASF group, to buy a 27 percent stake in Verbundnetz Gas, or VNG, put up for sale by gas supplier Ruhrgas after its merger with giant utility E.ON.

Wintershall and Gazprom, the world's largest gas producer, already have stakes in VNG of 15 and 5 percent, respectively.

"Acquiring VNG could be a very interesting project for Gazprom," the firm's spokesman, Igor Plotnikov, said.

"Together with Wintershall, we could consolidate a big stake in VNG, which would allow us to directly access consumers and pass through the board's important decisions," he said.

Ruhrgas has to sell its 37 percent stake in VNG, Germany's second biggest gas importer, as part of conditions the government tied to the approval of the Ruhrgas deal with E.ON, which is also obliged to sell its 5.26 percent stake in VNG.

WBD Seeks Investment

MOSCOW (Reuters) -- The board of top juice and dairy producer Wimm-Bill-Dann has decided to issue $100 million to $250 million worth of five-year Eurobonds, the Federal Securities Commission said Wednesday.

The report published in the commission's newsletter said UBS Luxemburg S.A. will lead-manage the issue.

The newsletter did not mention the time of the issue, but Wimm-Bill-Dann said earlier this year it planned to make the issue by the end of the year.

Analysts have said the company needs funds to modernize its factories and expand.

$300M Alrosa Bond

MOSCOW (Reuters) -- Diamond monopoly Alrosa will issue a debut five-year $300 million Eurobond in April, company vice president Fyodor Andreyev was quoted by Interfax as saying Wednesday.

"The annual yield will be determined later, but we think it will be under 9 percent," Andreyev said.

Last August, Alrosa said it wanted to issue a $500 million Eurobond in the first quarter of 2003, but later the company cut the planned issue to $300 million.

Tatneft: $1Bln Not Lost

MOSCOW (Prime-Tass) -- Oil major Tatneft, based in the republic of Tatarstan, denied media reports that it has lost $1 billion in Iraqi contracts due to the war in a statement Wednesday.

The company said that the media had misinterpreted public statements by Tatneft deputy general director Khamit Kaveyev.

The company may suffer the loss of drilling equipment that had already been shipped to Iraq, but this equipment is worth less than $2 million, the company said.

Tengiz Fine Reduced

ASTANA, Kazakhstan (Reuters) -- Kazakhstan's Supreme Court reduced on Wednesday from $70 million to $7 million an ecological fine slapped on a ChevronTexaco-led oil venture for storing sulfur at its Tengiz field.

The fine was imposed in December after a regional court in the country's oil capital, Atyrau, ruled that the venture had inflicted "ecological damage" by storing millions of tons of sulfur at Tengiz in western Kazakhstan.

Several TCO officials present in court expressed relief and embraced as the judge read out the final decision.

"We have been convinced that the rule of law and justice applies in Kazakhstan," said Zhumageldly Yelyubayev, TCO general manager in charge of contracts and legal issues. "We are satisfied with the outcome of the legal process which had lasted for a whole year."

TNK-BP Exports Set

MOSCOW (Prime-Tass) -- TNK-BP, which unites the Russian assets of BP and Russia's Alfa Group and Access/Renova, plans to export 46 percent of its 2003 oil output, the head of TNK-BP's investment department, Andrei Kushnarev, said Wednesday.

His comments came at conference held by British consulting company Day Robinson International.

Kushnarev said the company also plans to export 40 percent of its oil products output, but added that if oil prices drop significantly, the company will cut its export projections.

Nuclear Power Exports

MOSCOW (Prime-Tass) -- The Nuclear Power Ministry plans to increase its exports to $3 billion in 2003, minister Alexander Rumyantsev told a news conference Wednesday.

In 2002 the ministry's exports rose 5.2 percent on the year to $2.62 billion, while power output rose 3.6 percent on the year to 141.3 billion kilowatt hours, he said. By 2050, power output is expected to reach 320 billion kWh, he added.

In 2002, the ministry contributed 32.898 billion rubles to the consolidated budget, including 20.405 billion rubles to the federal budget, he said.

Russia's nuclear plants worked to 71.7 percent of their capacity in 2002, up 1.4 percent on the year, he said.

Kiev's Inflation Risk

KIEV (Reuters) -- Ukrainian President Leonid Kuchma expressed concern Wednesday that Ukraine would fail to meet its target of 6 percent annual inflation in 2003 as consumer prices have risen more quickly than expected.

Consumer price growth accelerated to 2.6 percent in the first two months of 2003 compared with a 0.4 percent drop in the same period a year ago.

"In two months we have inflation at 2.6 percent. As we have set a target of 6 percent in the budget, the government and central bank should pay serious attention," Kuchma told a news conference.

Auto Industry and War

MOSCOW (MT) -- Auto manufacturers GAZ and KamAZ are not taking heavy losses due to the war in Iraq despite their sizeable contracts there, the companies said Wednesday.

GAZ had planed to deliver its first 250-unit shipment of 5,000 Volga taxis to Iraq on March 21, but scrapped those plans when military actions began. The company said the cars were being stored in warehouses "and would be shipped as soon as the other side was ready to accept them," Interfax reported.

Even if they must be eventually written-off, the company said its losses would amount to only 20 percent of the contract's value.

KamAZ managed to ship 100 trucks worth $10 million to Iraq before the conflict began, which was higher than its target for the year. Last year the company sold 2,405 trucks to Iraq.