Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Business in Brief

Potanin Buys Pasta

MOSCOW (Prime-Tass) -- Agros has acquired 100 percent of one of Russia's largest pasta producers, Extra-M, the agricultural holding said Thursday.

The purchase, coupled with the recent acquisition of a leading St. Petersburg pasta factory, makes Agros one of the nation's largest pasta producers with 22 percent of the market, the company said.

Extra-M has about half of the Moscow market and about a fifth of the market nationwide.

Extra-M sold 70,000 metric tons of pasta last year for more than $33 million. It exported about 4 percent of its output.

The acquisition is in line with Agros' strategy of investing in the most profitable sectors of the market.

Agros, part of Vladimr Potanin's Interros holding, controls some 2 percent of the national grain market and has the second-largest granary capacity.

Soros Grills Svyazinvest

MOSCOW (Prime-Tass) -- The Soros Foundation, on behalf of Mustcom Ltd., has demanded an explanation from national fixed-line operator Svyazinvest regarding its $153 million purchase of software from Oracle, the foundation said in a letter sent Monday to Svyazinvest chief Valery Yashin and obtained by Prime-Tass on Thursday.

Mustcom said it is concerned about the possible negative consequences of the deal and asks Svyazinvest to explain why the purchase was not considered by the company's board of directors and why there was no tender for the contract.

Mustcom, a consortium led by the Soros Foundation, has a 25 percent plus one share stake in Svyazinvest.

On June 3, all of the seven interregional subsidiaries of Svyazinvest approved the Oracle deal.

Mustcom also asked Yashin why the software is being supplied by an intermediary company, Otkrytye Tekhnologii 98, and not directly by Oracle.

Mustcom is calling for a meeting of Svyazinvest's board two weeks after the company's annual general meeting, slated for Friday.

$83M Vietnam Deal

HANOI, Vietnam (Prime-Tass) -- Russian engineering holding Silovye Mashiny has secured an $83 million contract with Vietnamese company Lilama Corp. to deliver equipment for a new power unit at a thermal power station in Vietnam, the company said Thursday.

Silovye Mashiny will design, produce, supply, install and set in operation all the equipment in the plant's engine and boiler rooms.

The capacity of the new power block at the plant is expected to be 300 megawatts. The agreement is the first between Russia and Vietnam in the electric power sector.

Reserves Hit $64.9Bln

MOSCOW (Reuters) -- The Central Bank's gold and foreign exchange reserves rose to a new all-time high of $64.9 billion as of June 20 from $63.6 billion on June 13, the Central Bank said Thursday.

Gas Tariffs Rise

MOSCOW (Bloomberg) -- Gas transportation tariffs for independent gas producers will be increased by 20 percent to 16.56 rubles (54 cents) for every 100 kilometers of 1,000 cubic meters of gas pumped in Russia effective Aug. 1, Federal Energy Commission deputy head Oleg Zhilin said Thursday.

The current tariff for pumping 1,000 cubic meters of gas is 13.80 rubles.

MTS Profit Soars 87%

MOSCOW, (Prime-Tass) -- MTS's net profit rose 87.3 percent in the first quarter to $80.2 million under U.S. GAAP, the company said Thursday.

The cellphone operator said revenues in the period were $446.1 million, up 80.2 percent on the year, while its EBITDA increased 82 percent to $224.8 million. In the first quarter, MTS's average revenue per user was $18.5, down from $26.7 for the same period last year.

The financials for the first time included the results of Ukrainian operator UMC, in which MTS owns 83.7 percent.

UMC's subscriber base stood at 1.92 million users as of May 31.

Severstal Forecast

MOSCOW (Bloomberg) -- Severstal said it expects profit to double this year to as much as $450 million under Russian accounting standards.

The company expects 2003 net income of $400 million to $450 million, up from $203 million in 2002, Severstal general director Anatoly Kruchinin said at a news conference. Severstal, based in Cherepovets, expects revenue to swell to 76.5 billion rubles ($2.5 billion) from 60.3 billion rubles.

Severstal plans to invest $715 million through 2007 to boost raw steel production to 11 million tons per year, from 9.65 million tons in 2002, Kruchinin said.

The company's 2002 profit to international accounting standards probably fell to $178 million, from $284 million in 2001, and revenue probably rose to $1.97 billion from $1.79 billion, he said.

LUKoil-Conoco Plan

MOSCOW (Bloomberg) -- ConocoPhillips and LUKoil plan to drop their request for Russian tax breaks on a planned $1.5 billion venture to extract oil in the Arctic, as the companies consider developing energy resources in Russia and Venezuela.

LUKoil, the nation's second-largest oil producer, signed a memorandum of understanding in 1999 with ConocoPhillips, the third-largest U.S. oil company, to jointly explore the Northern Territories development, which has estimated reserves of 135 million tons (990 million barrels) of oil and 63 billion cubic meters of natural gas.

Rival to Airbus, Boeing

MOSCOW (AP) -- The future of Russia's struggling civilian aviation industry depends on the creation of a single national aircraft construction company, Deputy Prime Minister Boris Alyoshin said Thursday.

By the end of this year, private and state aviation companies will draw up a plan for the formation of a unified enterprise that could compete with the likes of Boeing and Airbus, he said.

Tariff-Setting Rules

MOSCOW (MT) -- At its last meeting of the spring session, the Federation Council on Thursday approved amendments to the law regulating tariffs on heat and electricity that oblige regional energy commissions to get the approval of the Federal Energy Commission before setting prices.

The government capped electricity tariff hikes in the federal budget at 14 percent this year, but current legislation gives regional energy commissions free rein in setting their own prices.

As a result, prices have jumped more than 14 percent in more than half of Russia's 89 regions this year, while some regions have hiked prices as much as 60 percent, fomenting discontent among centrist politicians who face voters in December elections.

The legislation approved Thursday allows the government to set different tariffs depending on the region, time of year and other variables.