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. Last Updated: 07/27/2016

Business in Brief

Gazprom Eyes Egypt

MOSCOW (MT) -- Gazprom, the world's largest gas producer, is among a number of energy companies which have expressed an interest in Edison SpA's gas assets in Egypt, a financial source said Friday, Dow Jones reported.

Gazprom "is for sure," the source said.

Among other companies eyeing a deal with Italy's largest private electricity and gas company, the source named Britain's BG Group PLC and Spain's Gas Natural SDG SA.

Separately, Dow Jones reported that an industry source said Italy's Enel SpA is also looking at those assets, which an adviser to one of the bidders estimated at around $1 billion.

Forex May Pass $60Bln

MOSCOW (MT) -- The country's gold and foreign exchange reserves may exceed $60 billion by the end of 2003, Central Bank deputy chairman Oleg Vyugin said Friday, Interfax reported.

Foreign reserves reached a record high of $54.6 billion by the end of last week, after rising $1.5 billion over the course of the week. Reserves have risen by $6.9 billion in the first 10 weeks of the year.

High oil prices have resulted in a flood of petrodollars, leading to a trade surplus that almost doubled on year to $5 billion in January.

MDM Placement?

NEW YORK (Reuters) -- In a further sign that Russia's small and fractured banking sector is recovering from collapse in 1998, MDM Financial Group said Thursday it is considering selling a stake in itself to an international investor.

MDM, one of Russia's oldest and largest financial firms, said it is not talking to any specific investor, but that it wants to diversify its ownership structure, currently just two shareholders, by selling a minority stake in the banking operations through a private placement offering.

"We are considering attracting an international investor who invests [in us] via private placement, as a first step. When it is going to happen is hard to say. It may be between 9 months to two years from now depending on the market," said Alexander Kotchergin, head of MDM's international business development. He added that MDM Group is not considering an initial public offering at this time because Russian banking assets are "undervalued."

Cherkizovksy Listing

MOSCOW (MT) -- Cherkizovsky, the country's largest meat processor, is planning a two-stage strategy to attract fresh capital from international investors, company president Igor Babayev said Friday, Dow Jones reported.

Babayev told journalists the company plans to sell a blocking stake of 25 percent plus one share via a private placement first, followed by an initial public offering in late 2004 or early 2005.

He said that the placements will most likely take place on the London Stock Exchange, because the company's underwriter, ING Barings, and investors are based in Britain, Babayev said.

Babayev said the main reason for seeking fresh equity is to raise money for an aggressive expansion, centered on increasing processing capacity and buying more livestock farms to reduce dependency on imported raw meat.

Inflation Target Woes

MOSCOW (Reuters) -- The Economic Development and Trade Ministry said Friday that industrial output growth was 6.5 percent in February and warned high oil prices might threaten a 10 percent to 12 percent official inflation target for 2003.

"If prices of crude stay high … it will be difficult to keep inflation under such a level," Deputy Minister Arkady Dvorkovich said. "It would also not be wise to keep it low as it would lead to an excessive appreciation of the ruble."

High global crude prices, lower capital flight and rising investment have flooded Russia with dollars and propelled the ruble to eight-month highs against the dollar, causing concern that its strength might hurt competitiveness of local producers.

The Central Bank is fighting to keep the ruble's real appreciation under 6 percent this year, while keeping consumer prices under control.

Consumer prices rose 4.1 percent in the first two months of the year, prompting economists to doubt that an official 2003 inflation target of 12 percent was achievable.

NIKoil Eurobond

MOSCOW (MT) -- Investment banking group NIKoil Co. is considering offering its first Eurobonds this year, a company official was reported by Dow Jones as saying last week.

Maarten Pronk, NIKoil's first deputy chairman, said the company has prepared to place up to $150 million in new debt overseas with a three-year maturity.

He said that with financial markets waiting to see what develops in Iraq, it may not be the best possible timing for a bond issue, but "things can change quickly."

"Eurobonds are a relatively recent phenomenon for Russian issuers, and we understand that they might be an interesting [asset] to have," Pronk said.

NIKoil is Russia's largest asset-management firm and owns an 8 percent stake in LUKoil Holdings. Last month, NIKoil got a controlling stake in Russia's third-largest retail bank Avtobank.

Kiev Plans 13% Tax

KIEV (Reuters) -- Ukraine plans to cut taxes and introduce a flat 13 percent income tax rate, hoping it will help create a prosperous middle class and reduce the ex-Soviet's state massive shadow economy.

Parliamentary officials, leading the tax reform drive, said the bill to cut taxes would be discussed next week and the new rate could be introduced from 2004 for at least two years.

Ukraine, a country of 48 million people on the fringes of an expanding European Union, is mired in poverty and corruption. Tax reform is seen as vital for economic recovery and cutting down on tax evasion.

Serhiy Buryak, head of the parliamentary committee for finances, said next week deputies will debate cutting income tax to 13 percent from the current rates of 10, 15, 20, 30 and 40 percent. Ukrainians earning more than $320 a month fall into the top tier.

"Tax pressure should be reduced.," Buryak told reporters. "We plan to introduce the flat rate for two years. Then we will see. We plan that anyone earning more than 400 hryvnias ($75) will pay 13 percent."

Villages Get Wireless

MOSCOW (Prime-Tass) -- Moscow's largest fixed-line operator, Moscow City Telephone Network, or MGTS, plans to offer wireless communications services for four remaining villages on the outskirts of Moscow which still do not have direct telephones, a source with the mayor's office was quoted as saying Friday. The villages are: Myakinino, Beresta, Marfino and Zakharkovo.

Residents who would like to use the service will be able to install a small transmitter and antenna on roofs of their houses, while MGTS guaranteed a reliable protection system against phone hackers, the source said.

Wireless telephone fees are expected to be comparable to the city's fixed-line fees, he added, saying that if MGTS connected the villages using regular telephone cables the cost would increase significantly.

S&P Raises Alrosa

MOSCOW (Prime-Tass) -- Standard & Poor's ratings agency announced Friday it had raised its long-term corporate credit rating of uncut diamond monopoly Alrosa to B from B-. The rating has a stable outlook.