Moscow press review for December 11, 2013
MOSCOW. Dec 11 (Interfax) - The following is a digest of Moscow newspapers published on December 11. Interfax does not accept liability for information in these stories.
POLITICS & ECONOMICS
The Russian government intends to recapitalize Vnesheconombank (VEB) by 200 billion rubles at the expense of the National Welfare Fund. Two foreign currency deposits that the sovereign wealth fund holds at the state lender will be converted into subordinated loans. VEB is asking for about 1 trillion rubles by 2020 (Vedomosti, p. 1).
A controversial Kremlin-sponsored bill to give investigators back the power to launch criminal tax cases independently, without consulting the Federal Tax Service, was passed by the State Duma in the first reading on Tuesday. The bill is now expected to be rewritten, as President Vladimir Putin has acknowledged it could be milder (Vedomosti, p. 4; Kommersant, p. 6).
OIL & GAS
Bulgaria, Slovenia and Hungary, through which much of Gazprom's South Stream gas pipeline will run, plan to defend the project at a European Union energy ministers' meeting Thursday. The EU's pressure on the project, which has increased dramatically recently, might ease after Lithuania passes the EU presidency to Greece, which has better relations with Russia (Kommersant, p. 1).
Russian tycoon Mikhail Gutseriev, the founder of Russneft, is actively building a new oil company. His Neftisa is close to buying two more assets in the Timan-Pechora region. These and other assets he is consolidating are valued at $2 billion. Market players reckon Gutseriev is creating the new company for resale, or consolidating assets for himself outside of the heavily indebted Russneft (Kommersant, p. 1).
METALS & MINING
Russia's largest salt mining and processing company, Russol is fighting in the Supreme Arbitration Court to challenge the Federal Resources Agency's decision to bar it from an auction for the country's third largest salt mine by reserves. The only other bidder might be Sireniti, a company thought to represent the interests of Artyom Chaika, son of Russia's prosecutor general (Kommersant, p. 9).
Russian pipe manufacturers, who are operating at just half of capacity and have seen margins drop to 2008 levels, have successfully lobbied for changes to the civil construction code that will dramatically restrict use of used pipes. A complete ban on them would boost pipe makers' revenues by about $600 million annual. But construction companies will be hit by higher costs (Kommersant, p. 9).
Gazprombank, a creditor of Russian Platinum, might become a shareholder in the company's copper and nickel mining projects on the Taimyr Peninsula, including Norilsk-1, in which the miner plans to invest $2.8 billion. Analysts reckon the bank could get a blocking stake, which would reduce Russian Platinum's borrowing (Kommersant, p. 11; Vedomosti, p. 12).
BANKING, FINANCE & INSURANCE
Russian retail lender Renaissance Credit earned more from selling insurance policies last year than it did from interest and penalties on loans, Fitch has found. Commissions on selling insurance to borrowers generated 72% of the bank's operating profit in 2011 and 60% in 2012, far more than at any of its rivals. But the time of such records is passing (Vedomosti, p. 1).
RETAIL & CONSUMER MARKET
Moscow city hall has approved strict new rules for the placement and appearance of signs, including height and size restrictions and in some cases requiring compliance with the concept of the city architecture committee. Retailers are concerned about the costs of compliance and fear a potential drop in traffic and sales (Vedomosti, p. 11).
Interview: Vincent Kobe, Vice President of Nissan Motor Co., Datsun Brand Chief (Vedomosti, p. 8).
REAL ESTATE & CONSTRUCTION
The renovation and redevelopment of the Luzhniki Olympic Complex for the 2018 World Cup championships will cost 83.5 billion rubles, Moscow city hall, which approved a plan for the property last week, estimates. The city expects private investors to finance more than half of this amount. But experts believe this will not be enough money (Vedomosti, p. 10).
TELECOMMUNICATIONS, MEDIA & TECHNOLOGY
Russian investigators raided the offices of Konstantin Malofeyev's Infra Engineering on Tuesday as part of a criminal case concerning theft of funds from national operator Rostelecom allocated in 2011 for modernizing telephone networks. Infra was one of Rostelecom's largest contractors until the latter's president was replaced in April 2013 (Kommersant, p. 1; Vedomosti, p. 16).
Russia's Communications Ministry has found new frequencies for 4G (LTE) mobile services. However, Yevgeny Roitman's Antares and Rocket & Space Corporation Energia are already seeking these frequencies. The State Radio Frequencies Commission will consider the issue Wednesday, along with technology neutrality for the 1800 MHz bandwidth (Vedomosti, p. 10).
TRANSPORTATION
Russian Railways' (RZD) net profit tumbled by more than 55% to 31.7 billion rubles in the first half of 2013 as rail freight shipments slumped 3.7%. The company is complaining about the loss of high margin freight and rising debt servicing costs. RZD's expenses also rose considerably due to the purchase of French logistics operator GEFCO, which analysts expect will only spoil RZD's results going forward (Kommersant, p. 11).