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. Last Updated: 07/27/2016

Business in Brief

Dutch Veggie Ban

AMSTERDAM (Reuters) -- Russia has banned imports of all vegetable products from the Netherlands from Dec. 3 after discovering a pest in lettuce and parsley shipments, Russia's Agriculture Ministry said Tuesday.

The pest, known as the western flower thrips or frankliniella occidentalis, spreads rapidly and destroys plants, the ministry said in a statement.

The Dutch farm ministry said it was unpleasantly surprised by the Russian move, adding it wanted to solve the pest problem as soon as possible.

Dutch vegetable exports to Russia are worth about 500 million euros ($665.4 million) a year, the ministry said.

In June, Russia, a major buyer of Dutch tulips and roses, also banned imports of flowers from the Netherlands after finding the same pest in a shipment of potted flowers.

Earlier this month, Russia also banned imports of vegetable products from Germany.

German Budget Boost

BERLIN (Bloomberg) -- German Finance Minister Hans Eichel's budget next year may be bolstered by the early repayment of between $3 billion and $4 billion in outstanding debt by the Russian government, Financial Times Deutschland said Tuesday, citing unidentified people close to the German administration.

Russia has offered the Paris Club of 19 creditor countries and the International Monetary Fund to repay $10 billion over the next three years, FTD said. Russian Finance Minister Alexei Kudrin said his government may repay between $7 billion and $10 billion as soon as next year, the newspaper reported.

Germany hasn't yet accepted Russia's offer, which isn't attached to any conditions at the moment, FTD said. The Russian government may expand on its proposal at the Paris Club's next meeting on Dec. 13, the newspaper said.

$500M Tanker Plan

MOSCOW (Bloomberg) -- Sovcomflot, Russia's largest shipper by tanker capacity, plans to spend $500 million in the next five years to build tankers that ship liquefied natural gas, in a project it's pursuing together with Nippon Yusen KK.

Nippon Yusen, Japan's biggest shipping company, said earlier this month it formed a joint venture with Sovcomflot. The venture is building two tankers in Japan and another two in Korea.

"You can't lose with NYKK," Sovcomflot deputy general director Alexander Krasnenkov said Tuesday. "We want to become part of the narrow circle of shippers, competing with companies such as Shell and ChevronTexaco."

Sovkomflot, whose fleet of 44 ships includes 32 tankers for transporting crude and oil products, is teaming up with Nippon Yusen at a time when Russia plans to start delivering LNG to markets such as the United States, Japan and Korea.

$426M Rail Bond Issue

MOSCOW (Bloomberg) -- Russian Railways, or RZD, the country's rail monopoly, will sell 12 billion rubles ($426 million) of bonds on Dec. 8 to help refinance debt and prepare for sale of Eurobonds next year.

RZD said Tuesday in a statement it will sell the bonds on the Moscow Interbank Currency Exchange in three offerings of 4 billion rubles each, maturing in one, three and five years.

"The company has the most lucrative correlation of financial indicators and the lowest debt burden, compared with other Russian state monopolies and private companies," vice president Fyodor Andreev said in a statement.

Salym to Invest $278M

MOSCOW (Bloomberg) -- A Royal Dutch/Shell Group-led venture plans to spend $278 million next year to develop the three Salym oil fields in West Siberia and start pumping crude from the largest deposit.

Salym Petroleum Development, a joint venture in which Shell Salym Development and Sibir Energy's Evikhon subsidiary each own 50 percent, will spend most of the money on West Salym, the group's biggest field, Salym Petroleum said Tuesday in a faxed statement.

The budget "will ensure fulfilling a major task -- to begin commercial oil production in West Salym in the fourth quarter of 2005 as contemplated by Salym Petroleum's license commitments," Salym Petroleum CEO Dale Rollins said in the statement.

"By the end of 2005, this will take total expenditure by Salym Petroleum in the Salym Fields development to over $600 million."

$50M Gazprom Fund

MOSCOW (Bloomberg) -- Investment bank Renaissance Capital raised $50 million from foreign investors for a second fund that lets them bet on the Russian shares of Gazprom, which Tuesday said it may buy oil assets to rival LUKoil as the nation's largest crude producer next year.

Renaissance, one of Russia's three biggest domestic bond underwriters, sold $50 million in shares of RenGaz Holdings Limited Series 2 last week and plans to raise as much as $200 million for the fund by the end of January, Oleg Jelezko, head of the brokerage's structured-products department, said Tuesday. The shares will begin trading on the London Stock Exchange's International Order Book this week, Jelezko said.

Money managers and investment banks have been creating funds that enable foreigners to get around a law banning them from buying Gazprom's domestic shares amid expectations the local shares will surge once the restrictions are removed. The domestic shares have more than doubled over the past 12 months as investors pumped at least $600 million into such funds. Russia has said it may end the restrictions next year.

$56M Titanium Play

LONDON (Bloomberg) -- Aricom said it plans to spend $56 million developing a new titanium mine in the Far East of Russia, betting that demand from domestic customers and neighboring China will keep rising.

The Kuranakh mine should start producing by the end of 2007, the London-based company said in a statement Tuesday. It should supply 240,000 metric tons of ilmenite concentrate and 660,000 tons of titano-magnetite concentrate a year. The project will be financed by equity and debt, with the details to be announced early next year.

"Aricom has received strong indications of interest from Chinese buyers interested in securing supplies of ilmenite, including one commercial offer," the company said in the statement. Supplies will also be sold to Russian consumers.

The $8 billion-a-year business provides the white powder for use as a pigment in plastics, pharmaceuticals, paper, cosmetics and food. Chinese demand for titanium dioxide rose 22 percent a year between 1997 and 2002, Aricom said.

Heinz Denies Report

MOSCOW (Bloomberg) -- H.J. Heinz Co., the world's biggest ketchup maker, declined to comment on speculation that it may buy a Russian competitor to expand in the former Soviet state, rejecting a report in Vedomosti late last week that the company is pursuing acquisitions in the former Soviet state.

Vedomosti misquoted Michael Mullen, a London-based spokesman for the company, Mullen said Monday in a telephone interview.

The paper had called him to ask about speculation Heinz may buy a Russian company, he said. Heinz doesn't comment on speculation, Mullen said.

"Heinz is interested in growing in Russia -- either organically or through acquisition," Mullen said.

Vedomosti said last week that Heinz may purchase Baltimor, the country's biggest ketchup producer, or No. 2 Petrosouz, both of which are located in St. Petersburg, citing unidentified people from the Russian ketchup industry.

Vedomosti deputy editor Alexander Gubsky declined to comment.

SEB Plans Bank

VILNIUS, Lithuania (Bloomberg) -- SEB, Scandinavia's third-biggest lender, plans to buy or start a bank in Russia, probably working through one of its three Baltic units, Verslo Zinios newspaper reported Tuesday, citing the head of the lender's Lithuanian business.

The company will decide on specific plans for Russia next year, the newspaper reported, citing Julius Niedvaras, president of Lithuanian lender Vilniaus Bankas. SEB-owned Latvijas Unibanka in Latvia and Eesti Uhispank in Estonia are also involved in the project, it said.

SEB, which agreed last month to buy a bank in Ukraine, is a step behind Nordic rivals like Swedbank in the bigger Russian market. Hansabank, a Baltic bank controlled by Swedbank, agreed in September to buy a bank in Moscow.

SEB has had a representative office in Moscow since 1970 and its Estonian unit runs a leasing company in the Russian city of St. Petersburg, Verslo Zinios reported.