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. Last Updated: 07/27/2016

Business in Brief

Gazprom Deal This Year

The government will pay for a 10.7 percent stake in Gazprom by the end of the year, Interfax reported Wednesday, citing Economic Development and Trade Minister German Gref.

The purchase of the stake will be registered by June 24, Interfax said. Gazprom holds its annual shareholders meeting that day.

Russia needs the stake to gain direct control of the company, allowing President Vladimir Putin to deliver on a pledge to end limits on foreign ownership of Gazprom shares. (Bloomberg)

$3Bln in Gazprom Loans

Gazprom will ask its shareholders to approve plans giving it the option to borrow as much as $1 billion from Gazprombank and $2 billion from Sberbank. Gazprom shareholders will vote on the loans at their annual meeting on Friday. (Bloomberg)

Gas Price May Hit Euro Bid

VILNIUS, Lithuania -- Gazprom may be seeking to undermine Lithuania's 2007 target for adopting the euro by increasing the price of its gas, a central bank official said on Wednesday.

Raimondas Kuodis, head of the bank's economic department, said Gazprom intended to raise the price of gas supplied to the Baltic states to the European average.

Kuodis told Lithuanian state radio that Gazprom's actions would fuel inflation and could lead the country to fail a key euro joining test imposed by Brussels. (Reuters)

Novatek '04 Profit Up 74%

Gas producer Novatek said on Wednesday its sales and net profits soared in 2004 due to higher gas and gas liquids output, and higher gas prices inside Russia.

Novatek, in which oil major Total wants to buy 25 percent, said its net profit rose 73.5 percent to 5.7 billion rubles ($199.7 million) while revenues increased by 46 percent to 25.2 billion rubles. (Reuters)

Novatek Confirms IPO

Novatek said on Wednesday it would proceed with an initial public offering in London, although France's Total has said it could scrap plans to buy 25 percent of the gas producer if it decides on a major IPO.

Novatek, which has a small number of shares listed in Moscow, named the location and lead managers for the offering but declined to disclose the volume.

It said international banks Morgan Stanley and UBS Investment Bank were appointed coordinators for the placement, while the same two banks and Credit Suisse First Boston would be bookrunners. (Reuters)

LUKoil's Geoilbent Bid

A regional court overturned a decision barring LUKoil from buying Novatek's 66 percent stake in a Siberian oil company, Interfax reported.

The Stavropol regional court's collegium sent the case back to the district court, which last week barred Novatek from selling 66 percent in Geoilbent to LUKoil after a company called Broadwood Trading & Investments sued to claim pre-emptive rights to the stake, Interfax reported.

LUKoil spokesman Dmitry Dolgov declined to comment, saying he had not seen the court documents. (Bloomberg)

Domodedovo Flights to U.S.

Moscow-based Domodedovo Airlines plans to start weekly charter flights to New York and Miami later this year, the company said in a statement Wednesday.

Domodedovo will be the third airline to fly between Russia and the United States, along with Delta Air Lines and Aeroflot. The company received permission in May from the U.S. Transportation Department and the Federal Aviation Administration.

Domodedovo is jointly owned by the state and the Russian airline KrasAir. (MT)

RZD Sees Steel Price Drop

Russian Railways, or RZD, expects domestic steel prices to fall 10 percent in the third quarter as world prices decline and the country's production increases.

The company buys 250,000 tons per year of ferrous steel from about 30 Russian plants, it said Wednesday.

RZD expects to spend 400 million rubles ($14 million) less on buying the metal in the third quarter compared with the second. It also expects cast iron prices to fall 20 percent over the period. (Bloomberg)

Gold Output in May

The decline in Russia's gold output narrowed to 3.7 percent in the first five months of 2005 from 7.4 percent in January through April 2004, the Russian Gold Industrialists Union said on Wednesday.

"In May 2005, gold output rose from May 2004, and the [year-on-year] decline narrowed from 2.5 tons to 1.6 tons [one month ago]," the industry lobby said in a statement.

Total output was 41.24 tons in January through May 2005, compared with 42.83 tons in the same period in 2004. Gold from mines fell 6.9 percent to 31.67 tons from 34.00 tons in the same period of 2004. (Reuters)

Foreign Truck Tax

Russia may institute an entry tax for foreign cargo trucks to help finance new roads, Interfax reported, citing Transportation Minister Igor Levitin.

A tax set at the average rate charged by European countries would generate at least $2 billion in budget revenue that could be used to improve and expand the national highway system, Levitin said. (Bloomberg)

Murdoch Eyes Ukraine

Ukrainian President Viktor Yushchenko told Rupert Murdoch, owner of News Corp., that Ukraine's new government wanted "serious investments'' in local media, and wanted to support free speech and boost competition among news sources.

The world's "leading media'' should open bureaus in Ukraine, Yushchenko told Murdoch during a meeting in Kiev Tuesday, according to a statement on the president's web site.

Yushchenko took office in January after campaigning to end media censorship, fight corruption and increase living standards. (Bloomberg)

Ukraine Gets Power Loan

Ukraine will receive a $106 million, 18-year loan from the World Bank to modernize power plants and improve energy security.

The loan, part of a program to accelerate the development of Ukraine's energy industry, will be used to upgrade nine hydropower plants that were built more than 30 years ago, the bank said in a statement. (Bloomberg)

VTB Roadshow

Vneshtorgbank has started a roadshow for a 30-year, $500 million bond and plans further issues this year that are insured against default, Vedomosti said on Wednesday.

Deutsche Bank was chosen as the lead manager for the latest issue, which matches a 30-year offering by the Gazprom gas monopoly last spring, Vedomosti said, quoting market sources. (Reuters)