Moscow press review for November 13, 2014
MOSCOW. Nov 13 (Interfax) - The following is a digest of Moscow newspapers published on November 13. Interfax does not accept liability for information in these stories.
OIL & GAS
Russian conglomerate Sistema, whose principal owner Vladimir Yevtushenkov is under house arrest, has decided not to challenge the October 30 court ruling ordering it to hand its controlling stake in oil company Bashneft to the state. Instead, the company said it will file claims against the companies from which it bought the Bashneft shares or their successors. It named Ural-Invest. Sistema could face claims from minority shareholders over its decision (Vedomosti, p. 1; Kommersant, p. 9).
Former Yukos managers have won another victory in their legal battle with Rosneft, winning a ruling in France that allows Yukos Capital to collect 7 billion rubles from the Russian state oil major by seizing its assets in this country. A similar Dutch court ruling in 2010 forced Rosneft to pay Yukos Capital 13 billion rubles. Rosneft does not have assets in France, but the latest ruling could weaken its position in similar cases in other jurisdictions (Kommersant, p. 9).
Rosneft is reportedly looking to sell one of its 13 oil refineries - Saratov, which it values at $400 million-$500 million. The Russian state oil major has excess refining capacity and the Saratov refinery requires costly modernization, sources said. Investors might be interested since the oil product market remains profitable, but a buyer has not been found yet (Kommersant, p. 11; Vedomosti, p. 13).
METALS & MINING
Amid problems with gas supplies, Ukraine has acknowledged the need for additional thermal coal imports from Russia. Most Ukrainian mines are closed due to the conflict in the east, and imports from South Africa have been called into question due to complaints about high prices. Russian coal companies are prepared to boost exports to Ukraine, and analysts reckon they could be about a third cheaper (Kommersant, p. 11).
BANKING, FINANCE & INSURANCE
The Russian Auto Insurers Union has asked the Central Bank to radically change the method for calculating the price of mandatory motor vehicle insurance, proposing to revise the coefficients that affect policy prices. The group says the base rate needs to be raised another 28%. Under its proposals, insurance prices could go up for young and inexperienced drivers in some regions, but decrease for experienced drivers in big cities (Kommersant, p. 5; Vedomosti, p. 10).
Interview: Konstantin Malofeyev, Founder of Marshall Capital (Vedomosti, p. 8).
RETAIL & CONSUMER MARKET
The owner of Russia's Svyaznoy Group, Maxim Nogotkov has lost his main asset, mobile phone retailer Svyaznoy, as well as the Enter retail chain due to the group's debts. The alliance of Onexim and pension fund Blagosostoyanie has acquired control of 90% of Svyaznoy Group following a default on debt to Onexim. The fate of Svyaznoy Bank is still in question due to its difficult financial condition. Nogotkov has only managed to hold on to the Pandora jewelry chain, which he owns with Sberbank (Kommersant, p. 1).
The introduction of municipal fees for certain types of businesses in Russia will not only cause big problems for traditional retailers, but also for online stores, the Association of Retail Companies warned. If the relevant bill is passed, foreign online retailers will gain an advantage over domestic ones, who will have to pay for delivery as well as for storage of goods. The lobby group is seeking an exemption from the fees for online retailers and delivery services (Kommersant, p. 1).
Vladimir Potanin's Interros group has agreed to sell Cinema Park, Russia's largest chain of movie theaters, to Said Kerimov, the 19-year old son of billionaire Federation Council member Suleyman Kerimov. Said Kerimov, making his first major independent deal, will reportedly pay slightly less than the $400 million that Potanin wanted for the chain (Vedomosti, p. 11).
TOURISM
Russian travel companies have seen sales of foreign vacation packages fall by almost half in October and November, the traditional peak period for booking trips for the long New Year holidays, primarily due to the weak ruble. Russians are choosing domestic destinations such as Sochi and cheaper foreign destinations such as Egypt over vacations in Europe (Vedomosti, p. 10).
Ahead of the New Year holiday season, Russian flag carrier Aeroflot has shut Tez Tour, one of Russia's biggest travel companies, out of its ticket booking system. The dispute might be due to Tez Tour's debt, but the travel company claims differences arose due to its plans to revise its contract with Aeroflot and cut flights, particularly to Thailand, the United Arab Emirates and European ski resorts (Kommersant, p. 12).
REAL ESTATE & CONSTRUCTION
Investors in Russian road projects are worried about the depreciation of the ruble and accelerating inflation, and want the government to insure them against new risks. They have begun discussing these risks and the possibility of state assistance with state company Russian Highways, which has offered several major concession projects with a substantial share of private financing at tenders this year (Vedomosti, p. 4).
TELECOMMUNICATIONS, MEDIA & TECHNOLOGY
Russia's commercial data center market has grown nearly 30% in 2014 to 11.9 billion rubles, but still only amounts to less than 1% of the world market. Analysts attribute this to low spending on information and communications technologies in Russia. However, the law requiring the personal data of Russians to be stored in Russia will enable the market to double its size (Kommersant, p. 13).
TRANSPORTATION & LOGISTICS
Sovcomflot, Russia's largest shipping company is looking for a partner in Asia for an order for six gas carriers for Novatek's Yamal LNG project. The shipper cannot raise the required $2.1 billion on its own. A contract for the construction of the vessels has still not been signed (Vedomosti, p. 12).
AUTOMOTIVE & ENGINEERING
Automakers might be compensated as early as the end of November for discounts offered under a Russian government vehicle scrapping program that slowed the slide in automobile sales in September-October. The industry minister said 10 billion rubles will be allocated from the anti-crisis fund in order to accelerate payment. Companies had been granting the discounts out of their own pockets and, given the difficulties of raising loans and high interest rates, could have faced liquidity problems (Kommersant, p. 1).
The decline of automobile sales in Russia slowed dramatically in October, to 9.9% year-on-year from 20.1% in September. With the ruble spiralling downward, buyers did not want to wait for inevitable price hikes or opted to invest their savings before they depreciated. The government vehicle scrapping program also helped. Sales in January-October fell 12.7% to 1.99 million automobiles (Vedomosti, p. 11).
