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. Last Updated: 07/27/2016

Business in Brief

Iraqi Debt Debate

LISBON, Portugal (AP) -- Russia will not cancel Iraq's debt accumulated during the rule of ousted leader Saddam Hussein, the speaker of the State Duma, Gennady Seleznyov, said in remarks published Wednesday.

Russia "will not wipe out the debt," he told the Portuguese daily Diario de Noticias.

"We would love to discuss the total amount of the debt with the legitimate Iraqi government, but unfortunately that does not exist any more," he said.

"I am convinced however that we will reach an agreement in the future on how this debt is to be reimbursed," he added.

The debt built up during Hussein's rule is now estimated at some $8 billion.

20-Year Ruble Bonds

MOSCOW (Reuters) -- The Finance Ministry plans to borrow a net 145 billion rubles ($4.78 billion) domestically in 2004 offering yields of 8.5 percent to 10 percent on its medium and long-term securities, a finance official said Wednesday.

"We plan to issue 263 billion rubles' worth of government debt and redeem 118 billion rubles' worth of paper," First Deputy Finance Minister Alexei Ulyukayev told reporters.

The Cabinet is scheduled to discuss the government's 2004 borrowing program on Thursday.

Ulyukayev said the ministry planned to offer the market its ruble-denominated bonds that would have a maturity of 20 years in 2004. He said the ministry was ready to offer a rate roughly matching the rate of inflation.

Currently the longest outstanding Russian ruble-denominated debt has a maturity of 15 years

$657M for E-Moscow

MOSCOW (Prime-Tass) -- The Moscow City Duma has approved a budget for the Electronic Moscow project of 3.47 billion rubles in 2003 and 19.9 billion rubles ($657 million) in 2003-07, Yury Roslyak, City Hall's economic policy and development department head, said Wednesday.

The total cost of the project is seen at 62.84 billion rubles, he said.

City Hall plans to sell 25 percent of the project to secure additional funding.

E-Moscow is a long-term program that sets guidelines for the creation of information-communications infrastructure in the city. The immediate task is to deliver to customers a whole set of services that fiber-optic networks are already capable of providing.

The project envisages creating and maintaining the Moscow city Web portal, a unified database of Moscow's population, developing a global navigation system in Moscow, using telecommunications and the Internet to enhance public security, making some city government services accessible on the web and many other projects.

The program is being implemented by a partnership between two major cable network operators -- Comcor and Mostelecom -- and Rossia television.

Excise Taxes to Rise

MOSCOW (Prime-Tass) -- The Federation Council on Wednesday approved a bill to raise excise taxes on a number of goods, including a 10 percent average increase on cars, ethylene and beer.

The bill also raises tobacco excises by an average of 20 percent and strong liquor excises by an average of 18 percent.

The bill also increases the land tax rate, excluding land tax for farmland, by 10 percent.

To take effect, the bill has to be signed by President Vladimir Putin.

VAT Cut Approved

MOSCOW (Prime-Tass) -- The Federation Council on Wednesday approved a bill reducing value added tax to 18 percent from 20 percent and amending oil and gas taxes from 2004.

The bill abolishes a 30 percent excise tax on natural gas, setting the tax rate of natural gas production at 107 rubles ($3.53) per 1,000 cubic meters.

The gas production tax rate is set equally for all gas producers: Gazprom, its subsidiaries and independent gas producers.

To additionally compensate for the lower VAT receipts the bill transfers 1 percent of the profit tax to the regions.

$670M Overseas Loans

MOSCOW (Prime-Tass) -- Russia plans to provide loans to foreign countries worth $670 million in 2004, First Deputy Finance Minister Alexei Ulyukayev told reporters on Wednesday.

He said a major part of the loans will be used to finance the reconstruction and construction of nuclear power plants in China, Vietnam, India and Bulgaria, as well as hydroelectric power plants in Tunisia and Morocco.

No other details were provided.

$58M MGTS Profit

MOSCOW (Prime-Tass) -- The Moscow City Telephone Network, or MGTS, posted a net profit of $58.26 million in 2002 under U.S. generally accepted accounting principles, up 5.8 percent on the year, the company said in a statement Wednesday.

MGTS's 2002 revenues rose to $417.83 million from $387.64 million in 2001.

The company's assets increased to $1.14 billion from $1.09 billion in 2001.

No other figures were provided.

$560M Gazprom Plant

MOSCOW (Reuters) -- Gazprom said Wednesday that it planned to spend $560 million on a new Siberian petrochemical plant over the next three years, covering three-quarters of the cost by loans from Western banks.

Gazprom deputy chief executive Alexander Ryazanov told reporters the world's largest gas producer would cover the remaining costs from its own profit. He declined to name the banks that Gazprom had already asked for financing.

"We will begin the construction this year and are planning to launch the plant over the next 2 1/2 or three years," he said.

Gazprom's massive $14 billion debt stood largely unchanged over the last two years, but the company has made efforts to replace its short-term debt by longer and cheaper borrowings, including a $1.75 billion eurobond, Russia's largest.

Ryazanov said the Siberian plant was designed a decade ago to produce up to 300,000 tons of polyethylene in Novy Urengoi near Gazprom's main Arctic gas fields, which also contain gas condensate and sour gases, precious petrochemical materials.

He also said Gazprom's petrochemical affiliate Sibur, in which the giant holds 75 percent, had returned to profit in the first quarter of 2003 after its loses more than doubled in 2002 due to six months of bankruptcy proceedings.

2nd Warship for India

ST. PETERSBURG (AP) -- St. Petersburg's Baltic Shipbuilding Plant on Wednesday delivered the second of three new warships to the Indian navy.

The Trishul is identical to the INS Talwar, a 4,000-metric ton Krivak Class warship that was delivered earlier this month. The frigate is armed with surface-to-surface missiles, a 100-mm artillery gun and high-tech sensory equipment.

Indian officials have said the ships will significantly expand the reach of the Indian navy.

Andrei Belyaninov, general director of Rosoboronexport, the state arms export company, said naval-related exports were increasing and now account for about 40 percent of all Russian military machinery shipped abroad, Interfax reported.

India ordered the three warships from Baltic Shipbuilding Plant in a $1 billion deal. The third is expected to be delivered later this year.

India is Russia's second biggest purchaser of military hardware, including fighter jets, tanks and other equipment worth billions of dollars. China is the No. 1 customer.

Golden-Telenor Talks

MOSCOW (Reuters) -- Telecoms operator Golden Telecom confirmed Wednesday that it was in merger talks with Norwegian Telenor's Russian fixed-line unit, lifting its shares nearly 8 percent.

Golden Telecom said it was in the early stages of talks with Telenor to swap new shares for the Norwegian carrier's Comincom-Combellga unit, which is Golden's second-largest rival for premium telecoms services in Moscow.

Their tie-up would reduce price competition in Russia's narrow market for premium telecoms services. It would also be a short route to the stock market for Combellga, for which Telenor has now paid a total of $150 million.

The firm said Tuesday that it had bought full control of the subsidiary.

"Golden Telecom wants to emphasize that these discussions are at a preliminary stage," a statement from the company said.