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

. Last Updated: 07/27/2016

Business in Brief

MTS Buys 5 Stakes

MOSCOW (Bloomberg) -- No. 1 wireless company Mobile TeleSystems announced Tuesday an agreement to buy stakes in five Russian mobile-phone operators for $70 million as it adds clients through acquisitions.

MCT Corp., a U.S.-based telecommunications company operating in Russia and Central Asia under the Indigo brand, will sell a 50 percent stake in Primtelephone, Astrakhan Mobile and Volgograd Mobile to MTS, as well as its 80 percent stake in Mar Mobile GSM and 43 percent stake in Uraltel.

Mobile TeleSystems has announced more than $700 million of acquisitions in the past two years, as the company tries to become the dominant wireless company across the former Soviet Union. Mobile TeleSystems sold $300 million in floating-rate notes on July 28 to fund more takeovers.

Primetelephone is the leading operator in the Russian Far East and Uraltel is the leader in the Sverdlovsk region.

Industrial Output Up

MOSCOW (Reuters) -- Industrial output rose 6.8 percent in the first seven months of 2003 compared to 3.9 percent over the same period a year ago, the government press office said Tuesday.

Quoting statistics committee data due for official release Wednesday, the press office put July year-on-year industrial output growth at 7.1 percent after 7.8 percent in July last year.

The industrial sector growth was a key driver behind a 7.2 percent rise in the country's gross domestic product in the first half of 2003, with part of the rise attributed to relatively low growth rates in the same period last year.

Officials forecast that industrial output will grow 5.8 percent this year after a 3.7 percent rise in 2002.

Yukos-Sibneft Merger

MOSCOW (Reuters) -- The Anti-Monopoly Ministry said Tuesday it would soon approve the merger between oil majors Yukos and Sibneft, quashing speculation the deal could collapse due to a dispute between Yukos and the Kremlin.

Anti-Monopoly Minister Ilya Yuzhanov told reporters he saw no major obstacles to approving the $12 billion to $15 billion transaction and that a final decision clearing the deal could be taken as early as this week.

Yukos plans to acquire Sibneft by the end of 2003 to become the country's largest and the world's fourth-biggest private oil producer.

Analysts had said the merger could be delayed or canceled due to a stand-off between Yukos and the Kremlin following the arrest of key shareholder Platon Lebedev, who has been charged with stealing state property in a 1994 privatization deal.

"We are allowing the deal on certain conditions. There are no major obstacles, but a few questions remain over a number of [regional] markets," Yuzhanov said.

Central Bank Profits

MOSCOW (MT) -- The Finance Ministry is calling for the Central Bank to pay 80 percent of its profits, rather than the current 50 percent, into the budget, local media reported.

The Finance Ministry will submit amendments to the Central Bank law to the State Duma along with the draft 2004 budget.

The ministry has already included the increased revenues from the Central Bank in the budget, the source said.

The Central Bank has opposed the move. Deputy Chairman Oleg Vyugin has said increasing the amount the budget receives from the Central Bank could spur inflation.

Oil Deal With Saudis

MOSCOW (MT) -- Russia and Saudi Arabia, the world's two largest oil producers and exporters, plan to sign their first energy agreement in early September during Saudi Crown Prince Abdullah's visit to Moscow, Dow Jones reported Tuesday.

The two countries plan to sign a framework agreement, without addressing any concrete deal, Dow Jones cited a source in the Energy Ministry as saying.

Among other agreements, the countries will also sign one on investment protection.

$500M LUKoil Loan

MOSCOW (MT) -- Oil major LUKoil announced Tuesday that it has arranged for a $500 million syndicated loan facility to finance the export and sale of crude oil under export contracts, to refinance short-term indebtedness, to finance LUKoil's investment program, and for general corporate purposes, Dow Jones reported.

ABN AMRO Bank and Citigroup are to act as mandated lead arrangers, and Credit Lyonnais is to be senior lead arranger and underwriter.

The deal is expected to be finalized by mid-fall 2003.

MMK Profits Soar

MOSCOW (Bloomberg) -- Top steelmaker Magnitogorsk Metallurgical Plant, or MMK, said profits in the first half of 2003 soared more than seven-fold as prices for the metal rose in Europe.

Net income rose to 9.6 billion rubles ($316 million), from 1.3 billion rubles in the same period in 2002, based on Russian accounting standards, the company said. Revenue rose to 45.5 billion rubles, from 25.8 billion rubles.

The Urals-based company's steel production rose 4.8 percent to 5.7 million metric tons in the first half of the year, according to a statement posted on MMK's web site. The company exported 54 percent of its output.

Kazakh Oil Exports Up

MOSCOW (Bloomberg) -- Kazakhstan boosted oil production 10 percent in the first seven months of the year, Interfax reported, citing the country's national statistics agency.

Oil production rose to 25.7 million tons (889,000 barrels per day), the news service said.

Gas production rose 15 percent to 4 billion cubic meters, Interfax said.

Kazakhstan plans to raise oil output 24 percent to 1.04 million bpd this year, and wants to more than triple oil output to about 3 million bpd by 2015.

Baltic Brewery Shares

MOSCOW (Bloomberg) -- Deutsche Bank, Europe's No. 2 bank by assets, on Monday started offering shareholders in Baltic Brewery, the country's largest beermaker, the chance to swap their stock for depositary receipts that will trade in Europe.

Deutsche Bank will act as the depositary for global depositary receipts backed by as much as 16 percent of Baltika's outstanding shares, said Mike Hughes, head of product management at Deutsche Bank, in an interview from London. Each GDR will be backed by one common or preferred share in Baltika.

Baltika did not object to the establishment of the GDR program, Hughes said.

Finnish Tire Investment

MOSCOW (Bloomberg) -- Finland's Nokian Renkaat Oyj plans to invest 120 million euros ($136 million) in 10 years to expand its business in Russia, Kommersant reported Tuesday, citing chief executive Kim Gran.

In 2005, the company plans to complete a new plant in Russia that will initially produce 1.5 million tires per year and later increase output to as much as 9 million per year, the newspaper reported.

The company's Amtel-Nokian Tires joint venture, formed in December with the country's third-largest tiremaker, Amtel Holding, plans to produce 500,000 tires this year and raise output fourfold next year. The partners plan to invest $25 million in the project, Kommersant said.

For the Record

Unified Energy System's export revenues rose 87 percent to 7.01 billion rubles as electrical power exports rose 33.6 percent to 9.59 billion kilowatt hours in the first half of 2003 compared to the same period in 2002, largely to due to a 47 percent rise in exports to Finland. (MT)

Gas tariffs are forecast to increase 20 percent and rail transportation tariffs will rise 12 percent in 2004, the Economic Development and Trade Ministry said earlier this week. (MT)

The 36.6 drugstore chain opened its first outlet outside Moscow on Tuesday. The store -- the company's 60th -- is located in Zhukovka, 8 kilometers west of the Moscow Ring Road. (MT)

No. 2 aluminum producer, Sual Group, has hired Brent Hegger, a manager from engineering group SNC-Lavalin, to run a $2 billion mining refinery and smelter project in the Komi republic. The project plans to produce 1.4 million tons of alumina per year. (MT)

Royal Dutch/Shell Group has signed a $56 million contract to use the Kholmogorsk Sea Port's services for five years as it advances with the $12 billion Sakhalin-2 project. (Bloomberg)