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. Last Updated: 07/27/2016

Business in Brief

Izhavto to Close Up Shop

Izhavto said it would shut down indefinitely this month and lay off 5,000 workers.

Izhavto, which assembles cars for Korea's Kia Motors and AvtoVAZ, will halt production at its base in Izhevsk, where it is a major employer, spokesman Dmitry Rumyantsev said.

The company has nearly 12 billion rubles ($354 million) in outstanding debt, three-quarters of which is owed to state-controlled Sberbank, Kommersant reported on Monday. (Reuters)

Oil Funds Lose $206Bln

Russia's sovereign wealth funds fell in March to a combined 7 trillion rubles ($206 billion) as the government began to transfer money to cover its first budget deficit in a decade, the Finance Ministry said Wednesday

The Reserve Fund fell to 4.1 trillion rubles ($121.1 billion), and the National Wellbeing Fund stood at 2.9 trillion rubles ($85.7 billion) in the month.

The ministry bought 600 billion rubles by selling $7.95 billion, 5.97 billion euros and 1.23 billion pounds from the Reserve Fund, which were held on accounts with the Central Bank, the statement said. (Bloomberg)

Kerimov Buys 25% in PIK

PIK Group, a Moscow home builder that has lost 74 percent of its market value in six months, said Wednesday that billionaire Suleiman Kerimov bought a 25 percent stake in the company from its biggest shareholders.

Kerimov's Nafta Moskva bought the stake from CEO Kirill Pisarev and chairman Yuri Zhukov, PIK said on its web site. PIK Group is considering mergers and acquisitions to pay or restructure debt of $1.2 billion at the end of last year, the company said March 20. (Bloomberg)

RusAl May Delay Plant

United Company RusAl is seeking to delay what would be the biggest Russian power plant to be built since the breakup of the Soviet Union as it renegotiates $15 billion of debt.

The plant is 40 percent too expensive and has too few customers, RusAl's controlling shareholder Oleg Deripaska said in a letter to state-owned utility RusHydro. Russia's four largest state banks, Sberbank, VTB Group, Gazprombank and Vneshekonombank, declined to extend financing for the project, according to the letter. (Bloomberg)

Total's Plans Cleared

Russia has cleared French oil major Total's investment plan for Russia's northern Kharyaga field for 2009 at $403.7 million, the Energy Ministry said Wednesday.

Kharyaga is a rare production sharing agreement, and like fellow Sakhalin-1 project, led by ExxonMobil, Total has fought tough battles with the government over its spending plans. (Reuters)

2 Superjets Start Test Flights

The first two Sukhoi Superjet 100 airplanes flew into Zhukovsky on Wednesday for a program of test flights, Prime-Tass reported.

The flights come about 10 months after the aircraft's maiden flight in May 2008 at Sukhoi's testing facility in Komsomolskiye-on-Amur.

Sukhoi head Mikhail Pogosyan said Wednesday that the firm hopes to begin deliveries toward the end of the year, adding that it already has 98 confirmed orders for the aircraft. (MT)

Iraq to Get Helicopters

Russia agreed to supply Iraq with 22 Mi-17 helicopters, state-run holding company Russian Helicopters said Wednesday, Interfax reported.

The vehicles were ordered by Airfreight Aviation of the United Arab Emirates, it said.

The announcement comes after United Arab Emirates Vice President, Prime Minister and Ruler of Dubai His Highness Sheikh Mohammed bin Rashid Al Maktoum concluded a two-day visit to Moscow by meeting with Prime Minister Vladimir Putin. (MT)

Razgulyai to Redeem Bonds

Razgulyai Group, a grain and sugar producer, increased the amount of bonds it is offering to buy back from investors as part of a debt restructuring, according to a statement on the company's web site on Wednesday.

Razgulyai offered to redeem 25 percent of its 8 billion rubles ($236 million) of bonds due in 2011, 2012 and 2013, and it will buy the remainder of the securities next year, the statement said.

The company previously offered to buy back 20 percent of the notes and 30 percent next year. (Bloomberg)

Inflation Hits 5.3% So Far

Russia's inflation rate in the year through March 30 was 5.3 percent, as tea and sugar prices rose.

Consumer prices climbed 0.3 percent between March 24 and March 30, the State Statistics Service said Wednesday. Last year, prices rose 4.8 percent in the year during the same period.

The cost of black tea climbed 0.9 percent, and prices for sugar advanced 0.7 percent, according to the statement. Gasoline prices fell 0.4 percent, and diesel declined 0.7 percent. (Bloomberg)

MTS Buys Eldorado Stores

Mobile TeleSystems agreed pay $23 million for the mobile-phone stores of Eldorado Group, it said in an e-mailed statement Wednesday.

The chain had 383 outlets in 153 Russian cities as of Jan. 1, according to the statement.

Mobile TeleSystems, known as MTS, is boosting its retail network along with competitors such as VimpelCom. In February, MTS bought handset chain ZAO for $60 million. (Bloomberg)

Current Account Shrinks

Russia's current-account surplus, the broadest measure of trade in goods and services, shrank in the last three months of 2008 as the price of commodity exports tumbled, the Central Bank said in an estimate Wednesday.

The surplus shrank to $8.6 billion in the quarter from $24 billion in the same period a year earlier, the Central Bank said. That was a smaller decrease than the median forecast of five economists surveyed by Bloomberg for a surplus of $8.1 billion. (Bloomberg)

For the Record

Kingfisher, Europe's largest home-improvement retailer, will open at least three Castorama stores in Russia this year and may open as many as seven, marketing chief Natalya Morozova said, RIA-Novosti reported. (Bloomberg)

Siberian Services Company, a drilling company whose clients include Rosneft, failed to make an early repayment of $100 million of bonds as requested by investors, according to two of the company's debt holders. (Bloomberg)