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. Last Updated: 07/27/2016

Business in Brief

Oil Output Disappoints

The Industry and Energy Ministry said Thursday that it had cut its oil output growth forecast for 2007 to 2.1 percent from the 2.5 percent it had expected earlier.

The ministry said Russian crude oil production would rise to 490 million tons from the 480 million tons produced last year, when the growth rate was the same 2.1 percent. Oil output growth has slowed to 2.7 percent in 2005 following big spikes in previous years, including a 9 percent growth in 2004 and a record 11 percent in 2003. (Reuters)

Polymetal IPO Booked Out

The initial public offering book of Polymetal, the world's No. 5 silver miner now seeking a valuation of up to $3 billion in a London listing, has been fully covered with one week still to go to the pricing, a source close to the listing said Thursday.

"The book is covered," said the source close to the IPO, whose roadshow began Jan. 24. "There's been heavy early Russian demand supporting oversubscription." (Reuters)

Gas Extraction Increases

Gas output in Russia will rise this year to 665 billion cubic meters, a 1.3 percent increase on 2006, the Industry and Energy Ministry said Thursday, Interfax reported.

The ministry said 656 bcm of gas was extracted in 2006, an increase of 2.4 percent on the previous year. Gazprom's share of the output last year dropped 83.9 percent from 85.9 percent in 2005, the ministry said in a statement. The gas allocated for the domestic market in 2006 was 398 bcm, a 2.2 percent increase on the previous year. (MT)

Markets Law Gets Support

Most Russians are in favor of the new regulations limiting migrant workers in the retail sector, a survey by state-run pollster VTsIOM has found, Interfax reported Thursday.

But approval rates for the measure have gone down over the last three months, from 75 percent in November to 68 percent after the rule enforcing a quota for migrant workers in markets came into force Jan. 15, according to the survey. VTsIOM's survey also found that only 26 percent of respondents had noted a drop in the number of foreign workers in retail markets after Jan. 15. (MT)

Bank License Revoked

The Central Bank appointed a temporary administrator to run Gorodskoi Klientsky Bank on Thursday, one day after revoking the lender's license.

Yury Gubochkin was named as the bank's head after Gorodskoi Klientsky's license was canceled Wednesday, the Central Bank's external relations department said. The Central Bank's decision was made after it found that Gorodskoi Klientsky had breached a series of banking rules, including providing provisions to insure savers' deposits. (MT)

Malev Buyer to Take Debt

BUDAPEST -- AirBridge, an investment vehicle for KrasAir co-owner Boris Abramovich, is expected to take over the full debt of Hungarian airline Malev when it buys the carrier, Hungarian Finance Minister Janos Veres said Thursday.

The Hungarian government, which expects to conclude the sale to AirBridge this month, will transfer Malev's assets to a state-owned holding company as collateral for the debt payment, Veres said. (Bloomberg)

New Alcohol Warning

A law obliging producers of alcohol products to place a health warning on alcohol containers came into force Thursday, the Health and Social Development Ministry's watchdog's web site said.

The label will advise individuals under the age of 18, pregnant women and people suffering from nervous-system, liver, kidney and digestive problems to refrain from consuming alcoholic products. On Wednesday, the government's chief epidemiologist, Gennady Onishchenko, reassured alcohol producers that they would not have to label the new health warning on bottles currently in circulation. (MT)

Ukraine's Airlines May Stop

KIEV -- Ukraine's airlines, including Ukraine International Airlines and Aerosvit, may cease their flights Friday amid a dispute with fuel companies over prices.

"We have fuel for today's flights as fuel company Luk-Avia Oil filled our planes yesterday and we paid the old price,'' Ukraine International spokeswoman Evheniya Satska said Thursday. "But the agreement has expired today and I am not sure we will be able to carry our 15 international flights scheduled for tomorrow.'' (Bloomberg)

Sveza Seeks $260M Loan

Sveza Holdings Limited, a holding company for Russian plywood producer Sveza Group, has launched syndication of a $260.4 million, five-year structured trade-related secured finance facility via initial mandated lead arrangers and bookrunners Commerzbank, Standard Bank and VTB Bank Europe, the banks announced Thursday.

International Moscow Bank joined the transaction as mandated lead arranger prior to launch, and underwrote and funded the deal together with the bookrunners. (Reuters)

Intracom Wins Contract

ATHENS -- Greek telecom systems developer Intracom Telecom, a unit of Russia's Sitronics and Greece's Intracom, said Thursday that it won a $2.8 million ISDN contract for Costa Rica's telecom provider.

Intracom Telecom will provide ISDN Network Termination units to ICE and RACSA telecom companies, the only fixed-line, mobile and Internet providers in Costa Rica, Intracom Telecom said in a statement. (Reuters)

Deutsche Sees Retail IPOs

Deutsche Bank, which managed more than $2 billion in Russian stock offerings last year, predicts retail, consumer and finance companies will lead record stock offerings in Russia this year.

About 30 Russian companies may raise $20 billion this year from initial public offerings, said Ilya Sherbovich, head of investment banking at Deutsche Bank's Moscow unit. (Bloomberg)

Estar to Expand Production

Estar Holding, Russia's biggest producer of stainless steel bars and cutlery, will more than double spending to $155 million this year to cope with a surge in orders from the defense and construction industries.

Estar expects to increase production to more than 2 million tons of steel products by 2009, CEO Andrei Saltanov said Tuesday. (Bloomberg)

Orlen Drops Yukos Case

PKN Orlen, Poland's largest oil company, dropped a 2.9 billion ruble ($109 million) bankruptcy claim against Yukos after buying the company's former Lithuanian unit.

Orlen had been seeking compensation for losses caused when the Russian government seized Yukos' assets, forcing the firm to cut deliveries to Poland. Orlen sealed the purchase of Mazeikiu Nafta, the only refiner in the Baltic States, in December. (Bloomberg)