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

. Last Updated: 07/27/2016

Business in Brief

IMF Cuts Growth Forecast

WASHINGTON -- The International Monetary Fund on Wednesday cut its 2005 growth forecast for Russia and warned that the country's damaged investment climate could hurt its economic prospects.

In its semiannual World Economic Outlook, the IMF said it expected Russia's economy to grow by 5.5 percent this year -- below its prior 6.0 percent forecast -- and by 5.3 percent in 2006.

Much of the weakness stemmed from sluggish mining and resource extraction activity, manufacturing weakness and an appreciating currency, the global lender said.

It also pinned some blame on the government's sanctions against oil company Yukos and its former chief executive, Mikhail Khodorkovsky, saying the actions scared off investors and squeezed the oil industry. (Reuters)

TNK: Slavneft Plan Secure

Oil firm TNK-BP does not see a threat to its planned asset split with Sibneft from the possible acquisition of Sibneft by gas monopoly Gazprom.

TNK-BP, half-owned by oil major BP, and Sibneft had divided the oil flows and retail network of their joint venture Slavneft and were currently valuing producing and refining assets, TNK-BP's executive director German Khan said in an interview.

Talks over the future of Slavneft are unlikely to collapse even if state-controlled Gazprom takes over Sibneft in a widely expected $12 billion deal, said Khan. TNK-BP and Sibneft split the oil flows of Slavneft, which produces 480,000 barrels per day, as of the middle of this year and currently market its crude separately. (Reuters)

Gasoline Prices Up 3.2%

Gasoline prices in Russia rose by 3.2 percent in the week ending Sept. 12, after record international prices last month spurred exports, prompting the government to seek a voluntary price cap on domestic fuels.

The average price of gasoline stood at 15.52 rubles per liter as of Sept. 12, the State Statistics Service said Wednesday in a statement. That is the equivalent of $2.07 a gallon. The average price of gasoline was 15.04 rubles per liter on Aug. 29.

President Vladimir Putin's government on Monday persuaded the country's six biggest oil producers, including LUKoil, to cap the domestic price of oil products until the end of the year to stop surging fuel prices. (Bloomberg)

Eni Denies Gazprom Talks

ROME -- Italy's biggest oil and gas group Eni has had no contact with gas giant Gazprom over a possible sale of a stake in Eni's gas network Snam Rete Gas, Eni CEO Paolo Scaroni said on Wednesday.

Newspapers have recently speculated that Gazprom might be a buyer of Snam, where Eni has to cut its 50 percent stake to 20 percent to comply with competition rules. Eni is the biggest single client of Gazprom. (Reuters)

RZD's Chinese Oil Delivery

Rail monopoly Russian Railways, or RZD, raised oil shipments to China by 22 percent over the first eight months, as Russian producers increased exports to meet growing demand from the world's most populous nation.

The monopoly transported 5.11 million tons (154,000 barrels per day) of oil to China in the first eight months, compared with 4.2 million tons in the year-earlier period, Russian Railways said Wednesday on its web site. (Bloomberg)

Mitsui, Evraz Join Forces

Coal and steel producer Evraz Group said it would create a joint venture with Japan's Mitsui to develop a large coking coal field in eastern Siberia.

Under the terms of the agreement announced Tuesday, Mitsui will take a 30 percent stake in the Denisovskoye project in Yakutia.

The field's reserves of hard coking coal are estimated at 70 million to 85 million metric tons, according to Evraz.

Evraz said it expected the field to produce about 2.4 million metric tons per year by 2008, and added that it expected to sell the output to steelmakers in the Far East and in Japan. (AP)

UES Restructuring

Unified Energy Systems' strategy and restructuring committee recommended shareholders vote to set up territorial generating companies without preferred shares, Vedomosti said Wednesday, citing an unidentified committee member.

Russia is splitting up UES' regional units along business lines and regrouping them into larger companies, including 14 territorial generation companies.

Regional units' shareholders will receive stakes in the new companies in proportion to what they own in the other units. (Bloomberg)

Trans-Siberian Loss Widens

LONDON -- Trans-Siberian Gold, which is developing mines in Russia, said its first-half loss widened as the company increased spending on exploration.

The net loss increased to $4 million, or 10.41 cents per share, from $1.9 million, or 6.79 cents, a year earlier, the company said Wednesday. Administration expenses rose 21 percent to $3.2 million. The company also had a $1.1 million exchange loss "from the impact of a strengthening dollar on sterling-denominated bank deposits," it said.

Trans-Siberian will start production at its Asacha mine, located in Kamchatka region, in October next year, Jocelyn Waller, the company's managing director, said Wednesday. (Bloomberg)

Faults in Grounded Planes

Regulators have found 28 defects in 13 Ilyushin-96 aircraft grounded last month after brake problems stopped a plane used by President Vladimir Putin from flying, Vedomosti said, citing a copy of the fault list.

The most serious design flaws were the reliability of cockpit control-panel buttons and the possible failure of automatic throttle and reserve power systems, the newspaper said, citing an unidentified Il-96 pilot.

The six worst defects have been fixed, so the Il-96s will soon be cleared to fly, Vedomosti said, citing an unidentified Russian transportation regulatory official. (Bloomberg)

Europeans Eye Sukhoi

TOULOUSE, France -- Sukhoi Civil Aircraft, the commercial jet division of military planemaker Sukhoi, said it is in talks with Air France-KLM, Deutsche Lufthansa and other foreign carriers about buying a new regional airliner.

The planemaker aims to improve its chances of selling the jet by meeting regularly with airlines to discover their needs, Svetlana Issayeva, deputy director of Sukhoi Civil Aircraft, said Wednesday.

The 60- to 90-seat Russian aircraft, which will be powered by an engine from Safran of France and NPO Saturn of Russia, will begin final assembly in July 2006, with the first flight expected in March 2007. (Bloomberg)

VimpelCom Loan

Mobile phone company VimpelCom has mandated Citigroup and Sumitomo Banking Corp. for a three-year unsecured $200 million syndicated loan, bankers said on Wednesday.

They said the loan was priced at 165 basis points over LIBOR, an improvement on the 250 basis points over LIBOR the company paid on a similar three-year unsecured $425 million loan it raised in March also underwritten by Citigroup. No further details were available. (Reuters)

Russky Standart Bonds

LONDON -- Russky Standart, a full-service Moscow-based bank, plans to sell $300 million in five-year bonds, according to a banker familiar with the transaction.

The bank hired ABN AMRO and HSBC Holdings to manage the sale, the banker said. (Bloomberg)

Promsvyazbank Bond

LONDON -- Promsvyazbank put initial yield guidance on a planned $150 million five-year Eurobond in the 8.75 percent area, a market source familiar with the details of the deal said Wednesday.

The deal could be priced perhaps as early as Friday of this week, or Monday of next week, the source said.

Moody's Investors Service put a "B1" rating on the deal. Standard & Poor's and Fitch Ratings both gave the bank a credit rating of "B." Citigroup is lead managing the deal. Just under a year ago, Promsvyazbank issued $100 million worth of two-year notes with a coupon of 10.25 percent. (Reuters)

Finansbank Bond Sale

Finansbank, the Russian unit of Turkey's Finansbank, plans to raise between $100 million and $200 million by selling foreign-denominated bonds and to use the money to fund consumer and corporate loans. The bank may start offering bonds this year or in the first three months of 2006, Bulent Ilgun, a Finansbank vice president, said Wednesday in a telephone interview. The bonds will mature in three to five years. (Bloomberg)