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. Last Updated: 07/27/2016

Business in Brief

Sovereign Eurobond?



PHUKET, Thailand (Bloomberg) -- Russia may sell about $2.5 billion of eurobonds by the end of next year, its first sale of new foreign currency-denominated debt since 1998, Finance Minister Alexei Kudrin said Friday.

Russia will sell the bonds "by the end of next year if the market situation is favorable," Kudrin said in an interview in Phuket, Thailand. "If it's not favorable then we may reschedule."

Russia has not sold eurobonds since defaulting on about $40 billion in domestic debt in August 1998.




1.3% Budget Surplus



MOSCOW (Reuters) -- The budget surplus in January-August was preliminarily set at 1.3 percent of gross domestic product, down from a 1.6 percent surplus in the January-July period, a Finance Ministry official said Friday.

The official said the January-August surplus amounted to 113.1 billion rubles ($3.69 billion) after a 111.7 billion surplus in the first seven months of 2003.

The 2003 budget sets a surplus of 0.6 percent of GDP, or 72.15 billion rubles.




Oil Export Duty Hike?



MOSCOW (Bloomberg) -- Russia may raise export duties on exports of crude oil and oil products by one-third starting Oct. 1 to gain more revenue from high export prices, Interfax reported.

The government's commission on foreign trade recommended increasing the duty on crude to $33.8 per metric ton from $25.1 per ton, the service said. Duties on oil products would rise to $30.4 per ton from $22.6 per ton, the commission said, Interfax reported.




Unilever Ad Deal



MOSCOW (Prime-Tass) -- Unilever-Russia and Media Service Video International have signed a four-year advertising deal, Video International general manager Sergei Vasilyev was quoted as saying by Kommersant on Friday.

Experts estimate the deal's value to "significantly exceed" $100 million, Kommersant reported.

With turnover estimated at $1 billion,Video International accounts for 70 percent of the country's television advertising sales. Unilever is the No. 2 advertiser in Russia, after Procter & Gamble.




MTS Buys Tomsk Firm



MOSCOW (Reuters) -- Mobile TeleSystems said Friday that it had agreed to acquire a local mobile phone firm in Siberia, Tomsk Cellular Communications, for $47 million.

"The completion of this deal will make MTS the leader in the cellular market of the Siberian macro region of Russia," MTS said in a statement.

The Tomsk operator had 175,000 clients at the end of August, which will be added to MTS's current subscriber base, estimated by analysts at more than 13 million, including other recent acquisitions.




$50M PIT Brewery



MOSCOW (MT) -- Domestic beermaker PIT will invest $50 million in building a brewery in the Moscow region with a capacity of 120 million liters per year by 2005, Vedomosti reported Friday. PIT now holds 4.1 percent of the beer market, which it hopes to boost to 5.6 percent after the new launch.




Severalmaz IPO?



MOSCOW (Bloomberg) -- Alrosa, which produces one-quarter of the world's uncut diamonds, may sell as much as 46 percent of its Severalmaz unit in an initial public offering to help finance a new diamond mine.

The share sale would raise $350 million to $500 million to fund development of the Lomonosov field in the Arkhangelsk region, company president Vladimir Kalitin said at a news conference Friday in Moscow. The field contains gems worth about $12 billion, or 18 percent of the country's rough diamond reserves.

Alrosa has also been in talks with Fleming Family & Partners, a British investment company, to finance the project. Alrosa will choose the option that will raise the most money, Kalitin said.




Alfa-Megafon Cleared



MOSCOW (MT) -- The Anti-Monopoly Ministry on Thursday gave the green light to Alfa Group's controversial acquisition of a blocking stake in No. 3 mobile operator Megafon, but disgruntled shareholders could still stop the deal.

Alfa Group's August purchase of 25.1 percent in Megafon has been opposed by Megafon's other shareholders because Alfa already owns 25 percent of No. 2 rival Vimpelcom.

"If Megafon's company charter has a clause that says shareholders must seek the approval of other shareholders before selling their stake to a competitor, then the sale could still go off," Renaissance Capital analyst Olga Zhilinskaya said. Most charters have such a clause, but because Megafon is a closed joint stock company, this information is not publicly available.




SUAL Eyes Montenegro



BELGRADE, Serbia and Montenegro (Reuters) -- No. 2 aluminum producer SUAL is eyeing Montenegro's sole aluminum maker Kombinat Aluminijuma Podgorica, but is not the only potential buyer, industry sources said Friday.

Last month Podgorica daily Pobjeda said industry sources had listed Swiss trader Glencore, France's Pechiney, Norsk Hydro of Norway, Canada's Alcan, U.S. major Alcoa and Russian firm RusAl among interested parties.

KAP said its August aluminum output was 10,000 tons. In January-August it produced 80,000 tons.




Meat Rights Sold



MOSCOW (Reuters) -- Russia sold at an auction Friday the rights to import 31,500 metric tons of frozen beef and 33,750 tons of frozen pork in 2003 at a discount tariff rate, for a total of 6.84 million euros ($7.4 million), the Economic Development and Trade ministry said.

These volumes represent 10 percent of the total quota on frozen beef and frozen pork imports set for this year.




2 Finnish Icebreakers



OSLO, Norway (Reuters) -- A Finnish shipyard won an order Friday to build two icebreakers for a Russian oil and gas project, renewing ties interrupted since the Cold War when it built escort vessels for Soviet warships.

Masa-Yards, a unit of Norwegian energy and engineering group Aker Kvaerner, said it would build two 100-meter-long supply vessels for an oil and gas project in eastern Russia by Exxon Mobil Corp. off Sakhalin Island.

The icebreakers, due for delivery in 2005, were ordered by the Far Eastern Shipping Co., which is working with Exxon. Shipping sources estimated that each vessel was worth slightly less than 500 million kroner ($66 million).




Yukos Lowers Forecast



MOSCOW (Reuters) -- Yukos said Friday that it had slightly downgraded its previous oil output forecast for 2003 but was likely to remain the industry leader in output and exports growth.

The company said it would produce slightly less than 83 million tons (1.67 million barrels per day) in 2003 because it faced transportation constraints in the first half of the year, along with other Russian producers.




LUKoil Sell-Offs



BAKU, Azerbaijan (Reuters) -- LUKoil said Friday that it plans to sell more noncore assets, including construction firms and vessels from its fleet, to boost profits and spur growth.

Chief executive Vagit Alekperov said LUKoil would keep its ice-class tankers to facilitate exports from its northern oil fields to international markets via its new oil terminal on the Barents Sea.

"We are considering selling general-purpose vessels, including our ships on the Caspian Sea," Alekperov told reporters during a visit to Azerbaijan, where LUKoil has many projects.




$7.5M Alrosa Auction



MOSCOW (Bloomberg) -- Diamond-mining monopoly Alrosa sold $7.5 million of uncut gems bigger than 10.8 carats after the government permitted foreign buyers to participate in an auction of large stones for the first time since 1996.

Alrosa, which produces one-quarter of the world's diamonds, sold all but one of the 71 batches offered, Yury Dudenkov, an Alrosa vice president, said at a news conference in Moscow. He did not name the 19 companies that bought gems, saying only that the foreign bidders were from the United States, India, Israel and Belgium.

Only domestic companies had been allowed to bid for large gems sold by Alrosa and Gokhran, the country's precious metals and gems reserve, during the past seven years. President Vladimir Putin in November signed a decree easing restrictions on the sale and export of gems and precious metals.




Prince Praises Russia



DOHA, Qatar (Bloomberg) -- Saudi Arabia's crown prince praised Russia's cooperation with OPEC on stabilizing oil prices and kept the door open for possible investments by Russian energy companies in the kingdom, the Saudi Press Agency reported.

"Russia has been playing a positive role in supporting OPEC's initiatives aimed at realizing fair oil prices and achieving stability in the oil market," Crown Prince Abdullah, Saudi Arabia's de-facto ruler, said in an interview with Interfax that was carried by SPA.