Moscow press review for December 13, 2013
MOSCOW. Dec 13 (Interfax) - The following is a digest of Moscow newspapers published on December 13. Interfax does not accept liability for information in these stories.
POLITICS & ECONOMICS
President Vladimir Putin called in his address to the Federal Assembly on Thursday for continuing the "deoffshorization" of the Russian economy, and surprisingly acknowledged that the economic slowdown in Russia this year is due to internal, rather than external reasons (Kommersant, p. 1).
President Vladimir Putin demanded in his address to the Federal Assembly that Russian-owned companies registered in offshore jurisdictions pay taxes in Russia. The government might now have a chance of achieving this through collection of information to identify beneficiaries and proposed amendments to the Tax Code. Putin also said offshore firms will not get government support, including VEB loans and state guarantees and government contracts (Vedomosti, p. 1).
A bill that would require a quarter of Russia's Civic Chamber to be made up of representatives of industry and union associations was submitted to the State Duma Thursday, immediately after President Vladimir Putin's address to the Federal Assembly, in which he made such a proposal (Kommersant, p. 2; Vedomosti, p. 3).
Russia ranks only behind China by the amount of illegal capital flight from the country, according to the Global Finance Integrity center. Some $881 billion was spirited out of Russia in the decade from 2002 to 2011, including a record $191.1 billion in 2011 (Kommersant, p. 6).
OIL & GAS
An intermediary might again emerge in Russian gas exports to Ukraine. Companies controlled by former Gazprom partner Dmitry Firtash are best suited for this role. Ukraine is reportedly pushing to return to an intermediary arrangement, but officials are not saying why (Vedomosti, p. 10).
European countries participating in Russia's South Stream project have given the European Commission a mandate to discuss the legality of intergovernmental agreements on the gas pipeline with Moscow. Talks might be held in January ahead of the Russia-EU summit. But the idea of revising the agreements has met firm opposition and Gazprom's partners are ignoring Brussels' complaints, while the EU energy commissioner has already softened his position (Kommersant, p. 9).
Lukoil president Vagit Alekperov and his deputy Leonid Fedun have taken out a loan from Goldman Sachs using about $600 million worth of shares in the Russian oil company as collateral. There are two theories about why they need the money: to buy more shares in Lukoil or clean up the books of Bank Petrocommerce prior to its sale to Otkritie FC (Vedomosti, p. 11).
Small oil companies in Russia are seeking tax breaks within the context of the special status of "independent oil companies," which will supposedly help them double production by 2030. But analysts believe tax breaks would only intensify the clear recent trend of small companies being bought up by larger players (Kommersant, p. 11).
METALS & MINING
Intergeo, the mining division of Mikhail Prokhorov's Onexim Group, is acquiring Toronto-listed Mercator Minerals. The merged company is expected to be worth $1.5 billion in six months and it plans to invest at least $1.8 billion in copper projects in Russia and abroad by 2018. Prokhorov expects metal prices to start climbing in three years (Kommersant, p. 11; Vedomosti, p. 12).
The Russian Direct Investment Fund and Baring Vostok Private Equity Fund V will help save the coal projects of Australia's Tigers Real Coal in Chukotka, which have a combined cost of $2.2 billion. They will get more than 35% of TIG for $48 million. The money will be used for a feasibility study, after which the company will be able to raise bank financing (Kommersant, p. 11).
BANKING, FINANCE & INSURANCE
The owner of Expobank, Orient Express Bank and a number of other Russian lenders, Igor Kim might buy a bank in the Czech Republic from Germany's LBBW. The deal could be worth 80 million-90 million euros, but will not include the corporate portfolio of the 11th largest Czech bank by assets (Vedomosti, p. 1).
The Central Bank of Russia will continue to revoke the licenses of banks, including major ones, some of which are on the verge of bankruptcy, the president of retail lender VTB24, former finance minister Mikhail Zadornov said Thursday. Such statements just fuel panic, analysts complained (Vedomosti, p. 10).
RETAIL & CONSUMER MARKET
The issue of tightening control over packages with goods Russian consumers buy from foreign online retailers has apparently been decided, as President Vladimir Putin has backed proposals to regulate online retail sales. Retailers believe this might not only involve additional import duties on purchases, but also tighter control over online retailers working in Russia (Kommersant, p. 9).
TELECOMMUNICATIONS, MEDIA & TECHNOLOGY
The creation of a mobile services joint venture with Tele2 Russia that Rostelecom's board approved on Thursday gives the national operator's creditors the right to call in debts early. However, the company will find the money as state bank VTB, which owns 50% of Tele2 Russia, will help if needed (Vedomosti, p. 11).
