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. Last Updated: 07/27/2016

Business in Brief

YukosSibneft Rolls On

MOSCOW (Bloomberg) -- Yukos, the country's top oil producer, said Monday it is going ahead with plans to sell eurobonds, contradicting a Sunday Times report that the offer is being delayed by a dispute with the government over alleged tax evasion. The report cited unidentified people familiar with the matter.

Earlier this month, Yukos said it had hired Citigroup Inc., Credit Suisse First Boston, Morgan Stanley and UBS AG to manage a eurobond sale this year to help finance a takeover of smaller rival Sibneft for as much as $14.5 billion in cash and shares.

The Anti-Monopoly Ministry said it plans to rule on the takeover this week.

Moscow-based Yukos, Russia's biggest oil producer, is under investigation for alleged tax evasion, and one of its owners is in custody on charges of stealing shares in 1994. The investigations have raised concerns that the deal may be halted. The transaction would create the world's No. 6 publicly traded oil company.

Yukos refused to comment on the size or timing of the bond sale. In May, the Financial News reported that Yukos may sell $1 billion of bonds, citing unidentified bankers.

MTS $300M Bond Sale

MOSCOW (Bloomberg) -- Mobile TeleSystems, Eastern Europe's biggest wireless company by subscribers, has sold $300 million in floating-rate notes to fund acquisitions, Andrei Braginsky, MTS's head of public and investor relations, said Monday.

Credit Suisse First Boston, the investment banking unit of Credit Suisse Group, arranged the sale, Braginsky said in a telephone interview.

The bonds, which mature in August 2004, pay interest at 400 basis points more than the three-month London Interbank overnight rate.

A basis point is equal to 0.01 of a percentage point. MTS has the right to buy back the notes at face value in six or nine months, Braginsky said.

MTS has announced more than $700 million of acquisitions in the past two years, according to Bloomberg data, as the company expands to try to become the dominant wireless company across the former Soviet Union.

MTS and smaller rival Vimpelcom are expanding outside of Moscow into areas such as Ukraine and Siberia, where potential subscriber growth is greater than in Moscow. MTS's total debt stood at $454.5 million at the end of 2002, or about 19.9 percent of the total worth of the company's assets. MTS shares advanced 89 cents, or 1.6 percent, to $56.50 on Friday on the New York Stock Exchange, valuing the company at $5.6 billion.

Sakhalin Crude Sold

MOSCOW (Reuters) -- A Royal Dutch/Shell-led group said Monday it had sold its first cargo of crude oil from Russia's remote eastern Sakhalin Island to the Philippines.

The company said in a statement it had loaded a 700,000 barrel cargo of light sweet crude on July 23 for delivery to a unspecified refinery in the Philippines.

"Sakhalin Island's proximity to Japan and Korea provides opportunities for back-haul freight into South East Asia, making it attractive for refineries in that region," the statement said.

Sakhalin Energy, uniting Shell, Japanese trading houses Mitsui & Co. Ltd. and Mitsubishi Corp., gave the final go-ahead in May to a huge $10 billion investment in its Sakhalin-2 project, which will be Russia's first LNG plant.

The project has already been producing oil from an offshore platform since 1999, and its output currently stands at around 70,000 to 80,000 barrels per day during ice-free periods lasting for around six months a year.

The group has been exporting its entire output mainly to refineries in Japan, South Korea and China with sporadic deliveries to Taiwan and the United States.

EU Assists Farms

MOSCOW (MT) -- The European Union launched a $3.9 million project Friday to help Russia's agricultural sector become more manageable, the European Commission delegation in Moscow said in a statement.

The project will run for over 30 months to support the government's efforts to develop a market economy in the agriculture sector.

Farm legislation lacks transparency and is full of red tape that prevent peasants in many agricultural regions from making use of the land shares they were given in the early 1990s.

On the Russian side, the Property Ministry and the Federal Land Cadastre Service will oversee the project.

The EU has commissioned two German companies to work on the project: the Gesellschaft fur Technische Zusammenarbeit GmbH and Bodenverwertungs- und -verwaltungs GmbH. Both have run consultancy projects in Russia.

Mongolia Taps Copper

MOSCOW (MT) -- Japan pledged Monday to help Mongolia develop copper mines as part of its efforts to repay billions of dollars it owes to Russia, Agence France Presse reported, citing officials in Tokyo.

Japanese Finance Minister Masajuro Shiokawa made the pledge while meeting his visiting Mongolian counterpart, Chultem Ulaan.

"We wish to help you if necessary as Japanese companies have a track record in low-cost strip-mining," Shiokawa was quoted as telling Ulaan in response to a request from the Mongolian visitor.

Ulaan told Shiokawa the Mongolian government has owed Russia about $11.7 billion since the Soviet era. The copper mine project was aimed at repaying the debt, he said.

Shiokawa was noncommittal on a request from Ulaan for Japan's cooperation in securing a European Bank for Reconstruction and Development loan for his country, the officials said.

No Nuclear Waste Site

MOSCOW (MT) -- Russia dropped its plans from last year to build a $70 million nuclear waste storage facility on the island of Novaya Zemlya in the Arctic Ocean, Nuclear Power Minister Alexander Rumyantsev said Saturday.

The facility is needed to hold liquid radioactive waste from decommissioned nuclear submarines until they are shipped to the Mayak reprocessing plant in the Urals city of Chelyabinsk.

Rumyantsev referred to the decision of the nuclear safety experts who said that rising temperatures in the next 150 years to 200 years threatened to thaw the region's permafrost and it could lead to leaks of the radioactive material.

He said that instead the ministry is looking into building a storage facility in a remote part of the Kola Peninsula.

The Novaya Zemlya project had been approved by experts from Finland, France, Germany, Norway and Britain and had undergone a government environmental analysis.

According to Norwegian environmental watchdog Bellona, of the 250 nuclear submarines built by the Soviet Union, only 40 have been completely dismantled.

8% Grain Harvested

MOSCOW (Reuters) -- The country has harvested about 10 million metric tons of grain so far this year, or about 8 percent of the total planted area, Agriculture Minister Alexei Gordeyev was quoted as saying Monday.

This is about half of what had been gathered by the same date last year, but analysts said the overall crop may still be in line with the official forecast of 70 million tons.

"This year's harvest is pretty good but there are certain difficulties," Interfax quoted Gordeyev as telling President Vladimir Putin during a meeting.

The crop is seen falling this year on higher than usual winter losses, spring sowing delays and severe drought that hit areas of southern Russia in May.

Last year's grain crop of 86.6 million tons helped Russia further establish itself as an emerging grain exporter alongside traditional heavyweights such as Argentina.

SovEcon, an independent research body, said about 7 million tons of grain had been collected in Russia by July 22.

M.Video Rosy Outlook

MOSCOW (Prime-Tass) -- M.Video, a Moscow-based domestic electrical goods retail chain, expects its turnover to rise 37 percent on the year year in 2003 to $500 million, the company said in a statement Monday.

In the first half of this year, the company's turnover amounted to $200 million. The company opened five new stores, two in Moscow, two in St. Petersburg and one in the Urals city of Chelyabinsk, investing an approximate $8 million in them in total.

Five more stores, two in Moscow, and one in each of the cities of St. Petersburg, Nizhny Novgorod and Ufa, are planned to be opened by the end of this year.

M.Video plans to keep this year's advertising budget at $6 million, unchanged from 2002, the statement said.

At the moment, the company's chain includes 19 stores in Moscow and eight across Russia.