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. Last Updated: 07/27/2016

Business in Brief

Swiss Yukos Probe

GENEVA (AP) -- The Swiss government has appointed a special prosecutor to determine whether officials violated legal secrecy by disclosing details of billions of dollars in investments linked to oil giant Yukos.

Yves Maitre said Monday that the government appointed him following a complaint by lawyers representing Yukos' main shareholder Group Menatep and Mikhail Khodorkovsky, jailed Yukos founder.

They claimed the disclosure - in the newsweekly L'Hebdo last March - helped fuel the Russian government's campaign against the oil company.

The magazine published details from a letter sent by the Federal Prosecutor's Office to its Russian counterpart, giving information on 6.2 billion Swiss francs (then $4.86 billion) in Yukos-linked shares and cash that was subsequently frozen in Switzerland.

Maitre said he would likely complete his investigation early next year. The Federal Prosecutor's Office declined to comment.

UFG Sued for $90M

MOSCOW (MT) -- A little-known company named Stroisportservis is suing United Financial Group for $90 million in a lawsuit over 45 million Gazprom shares that allegedly went missing, Vedomosti reported Friday.

The suit appears to be linked to the disappearance of some 108 million Gazprom shares in 1999 from Finansoviye Partnery, an affiliate of Bank Austria Creditanstalt. The shares ended up in the hands of six Russian companies affiliated with UFG, the paper said.

Finansoviye Parntery was later bought by a subsidiary of Sigma investment firm called Prestizh. Prestizh filed suit against UFG in a Rostov court but withdrew the case without explanation.

A source told Vedomosti that Stroisportservis represents the interests of Finansoviye Partnery's creditors.

The case is to be heard by Moscow Arbitration Court on Nov. 22.

Metals War in Delaware

MOSCOW (MT) -- A former director of the Kachkanar Vanadium Mining Complex, or GOK, is taking a long-standing battle for control of the mining company to a Delaware court.

Foreign-registered companies representing former GOK chairman Dzhalol Khaidarov, are filing suit against international entities and individuals some of the biggest names in the Russian metals industry. In the complaint, obtained by The Moscow Times, industry players like Oleg Deripaska and Mikhail Chernoi are accused of racketeering, money laundering and other illegal activities that led to the change in ownership of GOK in 2000.

A similar dispute was brought against the same people by metals magnate Mikhail Zhivilo in a New York court. A judge threw out the case in April 2003 after deciding that the United States had no jurisdiction over the matter.

Located in the Urals, GOK is Russia's only vanadium producer.

Aeroflot Profit Up 18%

MOSCOW (MT) -- Aeroflot reported an increase of 18 percent in net profits in the first three quarters of 2004, as growing passenger numbers and rising fares outweighed a hike in fuel prices.

Net profit grew by $18.1 million to $119.3 million year-on-year, with revenues up 23 percent, to $1.39 billion, the airline said in a statement Friday.

"Our profit grew due to increasing tariffs, primarily on the domestic market," Lev Koshlyakov, Aeroflot deputy general director said by phone.

The company flew 5.2 million passengers in the first nine months of the year, or 17.7 percent more year-on-year. Cargo was up 29 percent.

Aeroflot said that its board on Thursday approved the purchase of five Tupolev 154s and six Ilyushin 96s.

As expected, the board also elected Viktor Ivanov, a close aide of President Vladimir Putin, as chairman.

UES Ratings Upgrade

MOSCOW (MT) -- Standard & Poor's raised its long-term issuer credit ratings on power monopoly Unified Energy Systems to "B+" from "B," the ratings agency said Friday.

"The upgrade reflects the strengthening financial profile of UES and the gradual improvement of the Russian power and heat markets following continued economic improvement in the country," S&P credit analysts Eugene Korovin said in a statement.

The ratings on UES remain constrained by uncertainty over the progress and outcome of the ongoing reform of the power sector and the group's restructuring, including the potential transfer of additional liabilities to the parent company following planned spin-offs, the statement said.

S&P on Friday also affirmed its "B-" long-term credit ratings on Mosenergo power and heat utility.

Arctic Venture Approval

BRUSSELS (Bloomberg) -- ConocoPhillips and LUKoil won European approval to set up a venture that will invest as much as $5 billion to tap Russian Arctic oil fields.

The two partners agreed to set up the joint venture, called Rusco, to tap 16 fields in the Timan-Pechora province in the north of Russia, LUKoil first deputy chief executive Ravil Maganov said in September. The venture will pump as much as 200,000 barrels per day by 2011.

Rosneft Appraisal Date

MOSCOW (Bloomberg) -- The government has given Morgan Stanley 25 days to appraise state-owned oil producer Rosneft for sale to Gazprom, Interfax reported Friday, citing Valery Nazarov, the head of the Federal Property Agency.

The valuation should not cause any problems because both Gazprom and Rosneft are transparent companies, he said, according to Interfax.

Gazprom Export Plans

MOSCOW (Bloomberg) -- Gazprom, the world's largest natural gas producer, will continue to own gas pipelines and enjoy the monopoly right to export gas from Russia at least until 2020, Industry and Energy Minister Viktor Khristenko said Friday.

Oil production will become one of Gazprom's main activities after the company takes over Rosneft, while the gas producer's acquisitions in power generation are "temporary rather than systemic" investments, Khristenko told the International Energy Agency's deputy executive director William Ramsay.

Sakhalin LNG Deal

MOSCOW (Bloomberg) -- A Royal Dutch/Shell Group venture said it signed a final agreement to sell liquefied natural gas from its Sakhalin project off Russia's Pacific coast to Tokyo Electric Power Co., the world's second-largest LNG buyer.

The venture, known as Sakhalin Energy, said the agreement sets full terms and conditions for the gas purchase. Tokyo Electric will buy 1.5 million tons of LNG a year for 22 years, the venture said in a statement Friday. It did not specify the price or the total value of the contract.

Aluminum Exports Up

MOSCOW (Bloomberg) -- Russia, the second-largest aluminum producer after China, increased exports of the metal to countries outside the Commonwealth of Independent States by 21 percent in the first nine months of this year, the State Customs Committee said Friday.

Russia exported 2.81 million tons of aluminum to non-CIS countries, the committee said in a statement. Exports of nickel, of which Russia is the world's biggest miner, were unchanged at 183,800 tons. Exports of rolled steel totaled 7.7 million tons, the committee said, without giving year-ago figures.

Arms Exports to Fall

MOSCOW (Bloomberg) -- Russia's arms exports will decline 13 percent to about $5 billion in 2004 from last year's record, Vedomosti reported Friday, citing Rosoboronexport, the country's state arms exporter.

The export agency expected 2004 sales of arms and military technology to decline from $5.75 billion in 2003 as buyers seek to upgrade existing equipment, Rosoboronexport director general Sergei Chemezov said in Moscow in July.

Russia has contracted to supply $12 billion worth of arms abroad by 2007, Vedomosti daily said.

German Pharma Deal

FRANKFURT (Bloomberg) -- Stada Arzneimittel, Germany's fourth-largest maker of generic drugs, said it plans to buy pharmaceutical company Nizhpharm for as much as 85 million euros ($110 million).

Stada will buy 97 percent of Nizhny Novgorod-based Nizhpharm for between 80 million euros and 85 million euros, the company said in a statement to the Frankfurt exchange. The takeover is pending "positive results" of a due diligence investigation into Nizhpharm by Stada, the company said, without giving details.

Frankfurt Stadium

BRUSSELS (AP) -- European Union regulators on Friday cleared a joint venture between construction company Bilfinger Berger AG and sports rights agency Sportfive GmbH to operate the new stadium in Frankfurt that will host five World Cup matches in 2006.

The European Commission said it was able to approve the linkup under its fast track system, which allows approvals within a month when nobody lodges any complaints against the deal.

Four World Cup first-round matches and a quarterfinal will be played in the 48,132-capacity New Waldstadion, which is being built at a cost of 126 million euros ($162 million). The joint venture, to be called Stadion Frankfurt Management GmbH, will market and operate the stadium facilities.

Sportfive is owned by Luxembourg-based Advent S5 and German media giant Bertelsmann.

Bilfinger Berger is using its subsidiary HSG Technischer Service GmbH to conclude the deal.

Vinci Sales Rise

PARIS (Reuters) -- French construction giant Vinci posted a 6.3 percent rise in nine-month sales on Thursday thanks to continuing strength in the French construction market.

Vinci said turnover in the period totaled 14.2 billion euros ($18 billion), up from 13.4 billion euros a year earlier. Underlying sales, stripping out currency fluctuations and changes in corporate structure, rose 5.8 percent.

The company said its order book stood at 13.9 billion euros, up 15 percent on the same period last year.

Vinci said its growth was driven by strong demand in its domestic French market, particularly in its construction division. It said French sales in the first nine months totaled 8.8 billion euros, a rise of almost 10 percent.

The company said sales at its overseas operations rose 0.9 percent to 5.4 billion euros.

British Housing

LONDON (Reuters) -- House price inflation in England and Wales slowed to 16.27 percent year on year in the third quarter of 2004 from 16.98 percent in the second quarter, figures from a government body showed on Monday.

The average house cost ?187,971 ($345,600) in the July to September period this year, compared to ?161,665 last year, while the number of homes bought climbed 6.35 percent to 309,101, the Land Registry said in a quarterly report.

Monthly surveys by the Halifax bank and Nationwide Building Society showed house prices falling in October and mortgage approvals have also edged back, indicating lower demand for housing.

However, the Land Registry figures showed some areas of the housing market still booming. Property costs in Wales rose at the fastest rate for the second consecutive quarter this year, jumping by 28.26 percent to ?135,162 ($248,500) year on year. London prices, in contrast, grew by 9.7 percent.