Moscow press review for May 14, 2012
MOSCOW. May 14 (Interfax) - The following is a digest of Moscow newspapers published on May 14. Interfax does not accept liability for information in these stories.
POLITICS & ECONOMICS
Prime Minister Dmitry Medvedev plans to make his Cabinet more sensitive to the needs of the people. It will include several members of the "open government," and red tape will be cut by pushing through the launch of electronic government (Vedomosti, p. 1).
A march along Moscow's boulevards led by prominent Russian writers on Sunday, intended as a response to the mass arrests of protestors last week, drew an unexpectedly large turnout of 10,000 to 20,000 that stopped all traffic. Unlike earlier in the week, police did not intervene in the unsanctioned march (Kommersant, p. 1; Vedomosti, p. 2).
Media reports about how acting First Deputy Prime Minister Igor Shuvalov may have done business through his billionaire friends have not affected his career. He will probably retain his post. However, as of June 1 his family will transfer all assets to a blind trust (Vedomosti, p. 1).
Companies that are part of a group can be made to answer for the tax debts of one another, even if they did not conduct any direct settlements with one another, according to a lawsuit filed by the Russian tax authorities against weapons maker Izhmash. The Federal Tax Service plans to apply this practice in other tax disputes as well (Vedomosti, p. 7).
Interview: Acting First Deputy Prime Minister Igor Shuvalov (Vedomosti, p. 5).
METALS & MINING
Akron, a leading Russian producer of mineral fertilizer, is in talks to buy a 32.05% state stake in Poland's Azoty Tarnow. The deal would enable Akron to significantly strengthen its position on the European market (Vedomosti, p. 8).
BANKING, FINANCE & INSURANCE
Private equity fund Baring Vostok has bought $50 million worth of new shares in Tinkoff Credit Systems. The deal valued the Russian online bank at four times equity, which is extremely high for the current market, when banks are being sold at 1.2-1.3 times equity (Kommersant, p. 1).
More than half of the retail deposits at Alfa Bank consist of balances on settlement accounts. The cost of this money is 1.5% annually. By the amount of such balances, which reached 134.5 billion rubles in March, Alfa Bank has overtaken VTB 24 and is now second only to Sberbank, Russia's biggest lender (Vedomosti, p. 7).
RETAIL & CONSUMER MARKET
Cherkizovo Group, one of Russia's largest meat producers, has formed a joint venture with Spain's Grupo Fuertes to produce turkey meat. Cherkizovo hopes to turn the Tambov Turkey venture into one of Russia's largest turkey producers within three years at a cost of 4.5 billion rubles (Vedomosti, p. 10; Kommersant, p. 12).
REAL ESTATE & CONSTRUCTION
Vladimir Yevtushenkov, the billionaire principal owner of AFK Sistema, is reportedly going back into property development, which he abandoned three years ago when he sold Sistema Hals to VTB to pay off debts. The new development business could be headed by the former president of VAO Intourist, Alexander Arutyunov (Vedomosti, p. 1).
TRANSPORTATION
The reorganization of Moscow's Sheremetyevo International Airport could result in unexpected financial losses. Its merger with OJSC Terminal was not approved by creditor Nordbank AG. Sheremetyevo is concerned the loan agent will demand early repayment, and is asking the government to waive dividends for 2011 (Kommersant, p. 1).
The Transport Ministry might take some land away from Domodedovo in order to build another fuelling facility at Russia's largest airport. Vnukovo Invest is prepared to build it in an alliance with state oil major Rosneft (Vedomosti, p. 7).
Freight One, Russia's largest railroad operator, is selling 10,000 tank cars worth up to $500 million to Gennady Timchenko's Transoil. The deal will enable Transoil to remain a leading player on the rail freight market. Freight One, now controlled by steel magnate Vladimir Lisin, could use the proceeds to consolidate Russian Railways' Transcontainer (Kommersant, p. 9).
AUTOMOTIVE & ENGINEERING
Sales of new cars and light commercial vehicles in Russia jumped 18% year-on-year to 880,540 in the first four months of 2012, the automakers committee at the Association of European Businesses reported. This included 679,444 new foreign vehicles, 3.7% more than in the same period of pre-crisis 2008, which was a record year for the Russian automobile market (Vedomosti, p. 7).
Italy's Fiat has run into serious problems with sales in Russia. Without a major Russian partner, a role previously filled by Sollers, Fiat managed to sell just 144 vehicles in April. Now Fiat can only count on its official distributor Chrysler Rus, whose experience with other brands such as Jeep, Dodge and Chrysler has not been very successful (Kommersant, p. 11).
