Moscow press review for October 15, 2013
MOSCOW. Oct 15 (Interfax) - The following is a digest of Moscow newspapers published on October 15. Interfax does not accept liability for information in these stories.
POLITICS & ECONOMICS
President Vladimir Putin has submitted a bill to the State Duma that would give law enforcement agencies the right to independently launch tax investigations. The business community is worried that this could hurt honest businesses, as it will make illegal takeovers easier and increase abuses (Vedomosti, p. 1; Kommersant, p. 2).
The Audit Chamber, now headed by former deputy finance minister Tatyana Golikova, is questioning the feasibility of the budget plan for 2014-2016 and its ability to meet President Vladimir Putin's election promises. The program part of the budget, amounting to 58.5% of spending in 2014, is not ready at all, the fiscal watchdog said in a report (Vedomosti, p. 4; Kommersant, p. 6).
Russian police have arrested seven citizens of Uzbekistan suspected of passing counterfeit 50,000-ruble notes through bank machines and payment terminals. Police believe the group managed to pass over 16 million rubles worth of counterfeit bills in just a few days, causing major Russian banks to stop accepting 50,000-ruble notes at ATMs and other terminals (Kommersant, p. 4; Vedomosti, p. 2).
Interview: Nikos Kougialis, Minister of Agriculture and Natural Resources of Cyprus (Vedomosti, p. 8).
OIL & GAS
The approximately 100 gas transport projects that the European Commission plans to support to 2020 do no include a single new pipeline or project for gas supplies from Russia. The EC intends to make up the decline in its own production with imports of LNG and coal, while Gazprom's new pipelines might not find any customers (Kommersant, p. 11).
METALS & MINING
Russia's Investigative Committee has launched a criminal investigation against the CEO of potash giant Uralkali, Vladislav Baumgertner, who is now under house arrest in Belarus on charges of theft. The Committee is charging Baumgertner with abuse of office and plans to soon begin extradition proceedings (Kommersant, p. 5).
Rusal will on Tuesday hold its last general meeting with creditors this year in an attempt to refinance over $5 billion in loans. The Russian aluminum giant is due to pay about $2 billion in 2013-2015, and bondholders might tender another $1 billion in ruble bonds in 2014-2015 (Kommersant, p. 9).
If the government decides to reduce its stake in Alrosa to less than a controlling interest before 2020, the Russian diamond miner will have to redeem $1 billion in Eurobonds ahead of schedule, the company disclosed in the prospectus for its upcoming IPO (Vedomosti, p. 10).
BANKING, FINANCE & INSURANCE
The hole in the balance sheet of Pushkino Bank, which lost its license in September, is 15 billion rubles, according to preliminary estimates. This means that even senior creditors will only get about two-thirds of their money in the course of the bank's bankruptcy (Vedomosti, p. 10).
Neither growing bad debts nor tighter regulation kept investors from oversubscribing to TCS Bank's pricy IPO on the first day. The Russian retail bank increased the London IPO to $870 million. The price range values the lender at $2.6 billion-$3.2 billion (Vedomosti, p. 11; Kommersant, p. 9).
RETAIL & CONSUMER MARKET
Following riots in southern Moscow on Sunday, Russia's consumer protection watchdog intends to shut down the local Pokrovskaya fruit and vegetable depot that supplies 40% to 50% of fruit and vegetables to the Russian capital's non-chain stores. As a result, the former co-owner of the Moscow Champagne Winery, Igor Isayev and his partners could lose a business with annual turnover of $1 billion (Kommersant, p. 1).
Russia's air travel market has slowed for the first time since the financial crisis. Airlines carried 8.4% more passengers in September, compared to growth of 15.4% a year earlier. Growth also slowed in the first nine months of 2013. Analysts expect budget cuts to further reduce demand, especially on domestic and tourist flights, which will particularly hit second tier carriers, who are already having problems (Kommersant, p. 1).
Stalingrad has set a new box office record for Russian films, earning 520 million rubles in its opening weekend. The World War II epic, Russia's first film in the IMAX format, has been selected as the country's entry for the foreign-language Oscar category (Vedomosti, p. 11; Kommersant, p. 12).
TRANSPORTATION
The modernization of the Moscow railway hub will cost 1.5 trillion rubles in the period to 2025, Russian Railways estimates. The investments will never pay for themselves so the project should be funded by the government, the company believes (Vedomosti, p. 1).
The Russian Direct Investment Fund is continuing to expand on the infrastructure market and now wants to add a bridge across the Lena River to its portfolio. Three consortiums are bidding for the contract and the RDIF plans to join one of them (Vedomosti, p. 4).