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. Last Updated: 07/27/2016

Business in Brief

GE Brightens on Russia

BRUSSELS, Belgium (Reuters) -- GE wants to boost its Russian sales to $3 billion by 2010 up from annual revenues of $300 million at the moment as the country's purchasing power grows and political and social structures are put in place.

GE's European head Ferdinando Beccalli told Belgian daily L'Echo that the group would like to speed up its pace of investment in Europe and planned to invest $52 million to build a research and development plant in Germany next year.

Beccalli said the group's diversity and its wide geographical presence helped protect it from the global economic downturn.

"For example, the dollar's current weakness will not have any tangible effects on our consolidated results, even if it is obvious that our European operations will benefit from the euro's strength," he told the paper.

New Magazine Player

ZURICH, Switzerland (Reuters) -- Edipresse Groupe is to enter the Russian publishing market by acquiring a 52 percent stake in magazine publisher ID Kone-Liga Press ZAO, the Swiss media group said in a statement Thursday.

No financial details of the deal were disclosed.

Edipresse has signed a binding letter of intent with shareholders of the Russian magazine publisher, which publishes almost 20 titles, including the luxury class journal L'OPTIMUM, and several hobby magazines. In all the company sells about 800,000 magazines per month.

Edipresse expects the deal, subject to regulatory approvals, to be completed within one month.

After the transaction is closed, the name of the company will be changed to Edipresse Kone-Liga ZAO.

"ID Kone-Liga Press ZAO is an excellent platform to build a significant presence in the Russian market," the firm said.

Edipresse is active in Switzerland and the Iberian Peninsula and has operations in Poland, Romania and Ukraine.

Its mass market monthly publications include Plants Indoors, My Good Country House and Useful Herbs.

It also has several publications about knitting, needlework and sewing, including Kleine Diana, Sabrina, Knitting -- Your Hobby, Embroidery Imagies, Patchwork and Collection of Ideas and CHIC

Rostelecom Droops

MOSCOW (Reuters) -- Long-distance telephone monopoly Rostelecom said Thursday that its net profit fell 68.2 percent in 2002 due to bad debt expenses, increased depreciation charges and foreign exchange losses.

Rostelecom said in a statement that its consolidated net profit under international accounting standards fell to $37.2 million, well below analysts' forecasts of around $113 million, from $116.8 million in 2001.

"In the fourth quarter of 2002, Rostelecom took non-cash charges of $44.9 million. These consisted of $20 million in bad debt expense ($25.9 million for the full year), which affected both EBITDA and net profit," the company said in a statement.

Zenit Stake for Sale

MOSCOW (Reuters) -- Zenit Bank, majority owned by oil company Tatneft, said Thursday it was planning to sell up to a 20 percent stake in the bank to a foreign investor in line with its new development program.

The plan has been approved by its shareholders but neither timing nor terms of the sale have been set, Alexei Sokolov, the bank's chairman, told a news conference.

"We have just started consultations. It could be done through a sale of the existing stake in the bank, a bond issue or a new share issue," Sokolov said, adding that the bank could sell a stake either to a foreign bank or an investment fund.

Zenit's development program also aims at listing on the Russian bourse, said Sokolov, but he did not elaborate.

Zenit, among Russia's 20 biggest banks in terms of assets, aims to provide a full package of services to corporate clients. It had a share capital of $99 million on total assets of $727 million as of end-2002.

Gazprom Gets 5% Back

MOSCOW (MT) -- Gazprom confirmed Thursday it has returned 4.83 percent of its own shares to its balance sheet for $143 million, Dow Jones reported.

Gazprom transferred the shares to its general contractor, Stroitransgaz, in the 1990s in exchange for work.

"At the beginning of this year Stroitransgaz decided to pull out of the investment vehicle and in exchange received the notes, which at the time had a market value of $143 million," Alexander Krasnenkov, head of Gazprom's property management department, was quoted by the news wire as saying.

The shares are now on the balance sheet of one of Gazprom's financial subsidiaries, he said.

VAT Intake Swells

MOSCOW (Prime-Tass) -- The amount of value added tax collected rose 30.7 percent on the year to 252.16 billion rubles ($8.2 billion), an official with the Tax Ministry said Thursday.

Revenues from VAT are transferred to the federal budget.

Currently, the base VAT rate is at 20 percent, while VAT on socially important goods is levied at 10 percent.

The State Duma earlier this month passed in a first reading a bill that will lower the rate to 18 percent from 2004, while preserving the 10 percent privileged rate. The second reading is scheduled for Saturday

LUKoil in Egypt

CAIRO, Egypt (Reuters) -- LUKoil signed two new oil concession agreements with Egypt on Thursday that a LUKoil official earlier said had maximum forecast reserves of up to 423.8 million barrels.

The Egyptian Oil Ministry said in a statement that, under the two concession agreements, LUKoil would invest at least $26.1 million in exploration.

LUKoil will be sole operator of the new West Geisum and North East Geisum blocks, both offshore in the Gulf of Suez. It is already sole operator of a third concession, in Egypt's Eastern Desert near Hurghada, and is joint operator of another concession in the Western Desert with Italy's Agip.

Kiev Cuts VAT

KIEV (Reuters) -- Ukraine's parliament passed a bill Thursday to cut value added tax to 17 percent from 20 percent in 2004 in a move aimed at supporting economic growth and reducing the former Soviet state's unofficial economy.

The law, backed by an overwhelming majority of 321 deputies in the 450-seat chamber, also foresees a further cut in VAT to 15 percent from Jan. 1, 2005.

Finance Minister Mykola Azarov said the bill was one major step in implementing long-delayed tax reform in Ukraine, a country that has a mixed track record on economic reform.

Anti-Piracy Prize

MOSCOW (MT) -- The Coalition for Intellectual Property Rights, or CIPR, was named Association of the Year by Britain's Global Anti-Counterfeiting Group for "outstanding achievements in the fight against counterfeiting in Russia, the CIS and the Baltic States," CIPR said in a statement.

CIPR was praised for stimulating the adoption of stronger IP enforcement legislation in Russia, Ukraine, Kazakhstan and Latvia. Other award winners included the French Customs & Excise Service, The Economist magazine and the Gillette Co.

Piracy represents 8 percent of total world trade, according to the International Chamber of Commerce's counterfeiting intelligence bureau.

Annual losses to creators and developers of business software, music, film and books in Russia and other countries of the former Soviet Union exceed $1.2 billion, according to industry estimates.

Chicken Loan

MOSCOW (Reuters) -- The World Bank's investment arm, the International Finance Corp., said Thursday it had granted an eight-year, $15 million loan to develop a Russian chicken production project.

The loan was granted to modernize and expand the Stavropol Broiler firm owned by Agros, the farming arm of one of Russia's main financial and industrial groups, Interros.

"Today the IFC is investing in one of Russia's largest agribusiness firms. Russia is becoming a country of a major focus in the IFC's global investment activity," Peter Woicke, IFC executive vice president, told reporters.

MMK Profit Drops

MOSCOW (Prime-Tass) -- The net profit of No. 1 steel smelter Magnitogorsk Metallurgy Plant, or MMK, fell by 20 percent on the year in 2002 to $115 million under international accounting standards, the company said Thursday.