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. Last Updated: 07/27/2016

Business in Brief

GDP, Oil Forecasts Raised

The government has raised its official gross domestic product growth forecast for 2006 to 6.5 percent from 6.1 percent, a senior government source said Monday. The source said the government had raised its 2007 forecast to 6.0 percent from 5.7 percent.

He said the government had also raised its forecast for the price of oil it planned to use in 2007 budget calculations to $61.0 to $61.5 per barrel, from $58 previously.

The source said the new figures had been approved during a meeting chaired by Deputy Prime Minister Alexander Zhukov. (Reuters)

Soviet Debt Swap Planned

Russia will conduct the second swap of the Soviet Union's commercial debt for eurobonds in the first half of September, the Finance Ministry said.

The debt swap will include claims by foreign creditors of more than $600 million, the ministry said in a statement posted on its web site Monday. The debt will be swapped for Russia's eurobonds maturing in 2010 and 2030, the statement said.

The swap will follow the same terms set in the first exchange of the debt in December 2002, the statement said. (Bloomberg)

Fitch Raises Moscow Rating

Moscow's debt rating was raised one step by Fitch Ratings, bringing it level with the country's classification, because of continued improvement in the city's economy.

Moscow's long-term foreign and local currency ratings were raised to BBB+, the third-lowest investment grade, from BBB, Fitch said in a statement Monday. The outlook is stable. Fitch on July 25 raised its rating for Russia to BBB+.

Moscow's budget surplus after capital expenditure was 99.5 billion rubles ($3.7 billion) in the first half of this year, compared with the city's original forecast of a 61.4 billion ruble deficit for 2006, Fitch said. That is 17 billion rubles more than the city's total direct debt, according to the statement. (Bloomberg)

Rosneft Repays Debt Early

Rosneft repaid its debt to India's ONGC early, Interfax said, citing a company official whom it did not name.

Rosneft paid $1.3 billion ahead of schedule, the news agency said. The loan was guaranteed by oil deliveries from the Sakhalin-1 project in the Far East region.

ONGC, like Rosneft, is a partner in ExxonMobil-led Sakhalin-1, and extended the loan in 2001, Interfax said. (Bloomberg)

Rosneft Output Up 8.2%

State oil company Rosneft said first-half crude output climbed 8.2 percent, boosted by a former Yukos unit acquired after the government seized and sold the subsidiary to recover back taxes.

Production advanced to 38.5 million tons (1.56 million barrels per day) in the period, from 35.5 million tons in the same period last year, Rosneft said in a statement Monday.

Most of that increase came from Yuganskneftegaz, the former Yukos unit, which produced 26.9 million tons, up from 24.8 million tons. (Bloomberg)

LUKoil H1 Profit Falls 8.5%

Leading oil producer LUKoil reported on Monday an 8.5 percent decline in first-half net profits to Russian accounting standards, citing an increase in costs.

LUKoil said its net profits fell to 43.18 billion rubles ($1.6 billion) from 47.2 billion a year before, while in the second-quarter profits fell to 13.75 billion, from 29.42 billion.

The statement said costs rose partly due to higher prices of crude purchases from other parties. (Bloomberg)

Urals Zinc Output Rises

YEKATERINBURG -- Elektrotsink, the country's second-largest zinc producer, produced 5.6 percent more of the anti-corrosive metal in the first half of 2006 after boosting investment, the company's owner said on Monday.

Urals Mining and Metals, or UMMC, said in a statement that the plant produced 44,938 tons of zinc between January and June 2006.

Lead output rose 80 percent year-on year to 18,188 tons, UMMC said, without giving a reason for the larger increase. (Reuters)

Erste Bank: No Russia Plans

VIENNA -- Erste Bank der Oesterreichischen Sparkassen will spend the next few years digesting acquisitions in Romania and Ukraine and will not turn to the rapidly consolidating Russian market, its head said on Monday.

"We have grown very quickly in the last few years, and we just made a very big acquisition in Romania," Erste Bank chief executive Andreas Treichl told journalists at a news conference in Vienna. "We are not aiming to add new countries." Erste Bank has splashed out 6.3 billion euros (8.04 billion) on Central and Eastern European banks since 2000. (Reuters)

Polymetal Buyout Plans

Polymetal, the country's largest silver producer and second-largest gold producer, will buy out minority shareholders in its subsidiaries before an initial public share offering, Vedomosti reported.

The buyout will avoid "unpleasantness for future investors," the newspaper cited Vitaly Nesis, the company's general director, as saying.

The company plans to complete the buyouts by the end of September, Vedomosti added, citing company spokesman Albert Avetikov.

The company will sell a minimum 25 percent of its shares to the public on the London Stock Exchange in the first half of 2007, Avetikov said. (Bloomberg)

UES OGK-5 Stake Sale

Power monopoly Unified Energy Systems will sell a 25 percent stake in wholesale generator OGK-5 to a strategic investor in the first or second quarter of 2007, a company official said over the weekend.

"We already have offers from Russian and foreign companies. They are quite realistic," UES finance chief Sergei Dubinin said. He declined to elaborate on the bidders.

The UES board on Friday voted to approve an issue of OGK-5 shares to prepare it for the first major flotation under sector reforms. OGK-5 hopes to raise $400 million via the offering. (Reuters)

Yevroset Buys Ultra

The country's largest mobile phones and accessories retail chain, Yevroset, said Monday that it had acquired regional rival Ultra for an undisclosed sum. It also said in a statement that it planned to increase the number of Ultra outlets to 300 from 205 and expand the network to Moscow from St. Petersburg, Rostov-on-Don, Samara, Novosibirsk, Kazan and Yeketerinburg.

Ultra, with annual turnover of $400 million, will keep its name but will use Yevroset's logistics infrastructure, enabling it to lower costs. (Reuters)

NW Telecom Profit Up

ST. PETERSBURG -- Regional fixed-line firm North-West Telecom on Monday reported a first-half net profit of 1.35 billion rubles ($50.24 million) up from 1.16 billion rubles in the same period last year.

"Net profit growth shows that the company has made its position on the market stronger, that the choice of an aggressive policy in marketing new services and cost controls was right," the company, which services the country's northwest, said in a statement. First-half revenue slipped to 9.69 billion rubles ($360.6 million) from 9.83 billion rubles a year earlier.

North-West Telecom attributed lower revenue to the launch of new terms for long-distance and international calls, which started with the liberalization of the market from the beginning of this year. (Reuters)

Kazakhs Plan London IPOs

LONDON -- KazMunaiGaz, Kazakhstan's state-run energy company, is planning an initial public offering in London in the fourth quarter of the year, The Times of London said.

KazMunaiGaz is one of a number of large Kazakh companies preparing to sell shares in London, potentially raising about ?3 billion ($5.6 billion) in total, The Times said.

Eurasian Industrial Association, a Kazakh metals producer, is also planning to list shares in London, the Financial Times said. (Bloomberg)

Namibia, VTB JV Plans

WINDHOEK, Namibia -- Capricorn Investment Holdings, a Namibian financial service company, has formed a joint venture with Vneshtorgbank, once the Soviet Union's foreign trade bank, said Gida Nakazibwe-Sekandi, Capricorn's marketing director.

The joint venture, known as VTB Capital, will seek to attract investment to Namibia from Russian and other foreign businesses, Nakazibwe-Sekandi said by e-mail from the Namibian capital, Windhoek, on Monday. (Bloomberg)