5 Nov 2009 10:25

Moscow press review for November 5, 2009

MOSCOW. Nov 5 (Interfax) - The following is a digest of Moscow newspapers published on Nov 5. Interfax does not accept liability for information in these stories.


Oleg Deripaska's En+ Group is trying to change the terms of a loan from Alfa Bank . The Moscow Arbitration Court received a lawsuit from En+ Group against Alfa Bank on Tuesday, the court said. An En+ representative declined to give more details. En+ is negotiating the restructuring of its debts amounting to about $1 billion with a number of banks, but no agreement has yet been signed, one of the reasons being that the company's debts with Alfa Bank have not been settled, according to En+'s two creditors. En+ owes $120 million to Alfa Bank, and the latter insists that En+ cannot even dispose of the shares of its key asset, UC Rusal ('Battle Again').

UC Rusal has reached an agreement with power companies on electricity supplies. The price for electricity will be pegged to aluminum quotations on LME. Even paying the maximum prices, UC Rusal may save up to 13 billion rubles a year. Vedomosti has learned that the company agreed with the Krasnoyarsk Hydropower Plant and Irkutskenergo , both controlled by UC Rusal co-owner Oleg Deripaska's firms, on supplying electricity to three aluminum plants in Bratsk, Krasnoyarsk, and Irkutsk. The boards of directors of the power companies have endorsed the contracts for 2020 and 2018 respectively, although the contracts have not yet taken legal effect because of some law restrictions, two bankers who received this information from UC Rusal told the newspaper. They did not know what restrictions these were and when the contracts may actually come into force ('Deripaska's Curve').

Vedomosti has learned new terms of the restructuring of UC Rusal's debt to Mikhail Prokhorov, which should increase the businessman's share in the company to 19.2% rather than the earlier planned 18.5%. Bankers are unaware of what will be done with the rest of the debt. Two sources close to UC Rusal said this debt would be restructured on the same conditions that the company had offered to Western banks, to which it owes $7.4 billion. Their loans will be extended until the end of 2013 with the option to extend them for another three years ('Bargain Struck').

The Cypriot company GLK Investment has filed a $200 million lawsuit with the Moscow Arbitration Court against Switzerland's Eurocement Holding AG owning the Russian holding Eurocement Group. The latter will act as the third party in the proceedings, the court said in a statement available on its website. The matter involves the debts by the companies belonging to Eurocement's prime beneficiary, Filaret Galchev, for Eurocement's shares bought in 2007 from companies belonging to Eurocement Group's former owner Georgy Krasnyansky, sources close to Eurocement and Krasnyansky told Vedomosti. Eurocement Group, Galchev, and Krasnyansky refrained from comments ('Cement Business', see also Kommersant, page 9, 'Eurocement Splitting into Shareholders').

The Finance Ministry will submit amendments to the 2009 budget to the State Duma next week, Deputy Prime Minister and Finance Minister Alexei Kudrin said. The matter will concern the redistribution of the funds reserved for increasing banks' capitalization through OFZ and for state guarantees. The government has decided that the 300 billion rubles allocated earlier for banks' capitalization will better serve the so-called backbone enterprises and the unemployed. Avtovaz is among the priority money receivers ('Avtovaz Instead of Banks', see also Kommersant, page 1, 'Avtovaz to be Covered by State Bonds').

General Motors will not sell Opel to the consortium of Canada's Magna and Sberbank . The GM board of directors explained its decision by the improvement of the situation in GM's business over the past several months and Opel/Vauxhall's importance for the company's global strategy. Magna understands the GM board of directors' decision and promises to continue supporting Opel and GM, said Siegfried Wolf, Magna's co-chief executive officer ('Russians Won't Drive Through', see also Kommersant, page 1, 'Magna and Sberbank Drive Past Opel').


The reasons why the French energy concern GdF Suez has still not made a decision on joining the Nord Stream project may be that Gazprom has suggested that the French company part with a 5.26% stake in Verbundnetz Gas, a major gas distribution company in eastern Germany. GdF Suez replied to this that it was considering the joining of the competing Nabucco project (page 11, 'GdF Suez to be Admitted to Nord Stream').

Allegations that the Russian Central Bank may be forcing banks to limit interest rates on deposits have been confirmed officially. Kommersant has learned that the regional Universal bank had received a directive from the Central Bank to reduce its interest rates, and the Central Bank admitted that this was not the only case of this kind. It is difficult to judge how involuntary the reduction of interest rates by banks is because neither banks nor the Central Bank are inclined to advertise such measures (page 9, 'Banks Understand Force of Compulsion').