Russia 090813 Basic Political Developments

Standard Bank Says Russian Deal With Troika Dialog On Track

http://online.wsj.com/article/BT-CO-20090813-704022.html

JOHANNESBURG (Dow Jones)--Standard Bank Group Ltd. (SBK.JO) Thursday said it continues to work on a deal that will see it take one-third of Troika Dialog (TROYVT.RS), Russia's largest independent investment bank.

"The detailed planning for the implementation of this transaction and the regulatory process are on track," the Johannesburg-based company, Africa's largest lender by assets, said.

Standard Bank in March said it planned to buy a 33% stake in Troika, part funded by the sale of its ZAO Standard Bank operation in Russia to Troika.

-By Robb M. Stewart, Dow Jones Newswires; [phone]; [e-mail]
AUGUST 13, 2009

Russia to Start 'Clunkers' Plan

http://online.wsj.com/article/SB125010543330426731.html?mod=googlenews_wsj

By WILL BLAND and STEVE MCGRATH

Russian lawmakers plan to support the country's domestic-car industry with a trade-in program similar to the "cash for clunkers" plans that have lifted auto sales in Europe and the U.S.

The Trade and Industry Ministry hopes to sway prospective car buyers by offering a 50,000 ruble ($1,550) rebate toward a new car when they hand in old vehicles to be scrapped, a ministry spokeswoman said. The program is expected to be launched early next year, she said.

To qualify, cars must be more than 10 years old, and the rebate can be spent only on Russian-made cars. That would include cars made by companies such as Ford Motor Co., Renault SA, General Motors Co., Volkswagen AG and Nissan Motor Co., all of which have factories in Russia. These scrapping deals benefit manufacturers of small cars because to get the discount, consumers must buy cars with low carbon-dioxide emissions.

Ford has been a big beneficiary because its subcompact Fiesta and Ka models meet the criteria. However, most European governments have set a budget for the programs, and they are set to end when the money runs out. The company warned that industrywide sales in Europe, the world's second-largest auto market after the U.S., could fall by as many as two million new vehicles in 2010 if the programs are cut off at the end of this year.

Despite the scrapping programs, industry executives remain cautious, predicting the downturn will last through at least next year. One of the biggest struggles is in Russia, where the drop in oil prices has pushed the economy into a deep recession and pushed the country off its course to become the biggest auto market in Europe.

Write to Will Bland at [e-mail] and Steve McGrath at [e-mail]

$1Bln in Emergency Loans Almost Gone, AvtoVAZ Says

http://www.themoscowtimes.com/article/1009/42/380647.htm
13 August 2009By Gleb Stolyarov / Reuters
AvtoVAZ, partly owned by Renault, said it has spent nearly all the 33 billion rubles ($1 billion) in emergency loans it got from the state, mainly to settle debts to suppliers.

In March, Prime Minister Vladimir Putin ordered 25 billion rubles in state funds to be disbursed to AvtoVAZ and asked state banks to provide bridging loans of another 8 billion rubles.

In a statement on Wednesday, AvtoVAZ said it had spent 24.3 billion rubles out of the 25 billion ruble loan, having repaid the 8.04 billion ruble bridge loan, 14.02 billion rubles to suppliers and the rest as wages, taxes and loans.

It has also spent 6.17 billion rubles from the bridge loan to settle accounts with suppliers, 1.63 billion rubles to pay wages and 0.2 billion rubles to pay taxes.

It said the state loans allowed it to see overdue debts fall 75 percent, while the amount it owes suppliers fell by over 85 percent.

VTB Capital analyst Yelena Sakhnova said it would be difficult for AvtoVAZ, which owed 28 billion rubles to suppliers as of March 31, to pay out the remainder without state support.

“Despite a certain revival in July, demand for the Lada remains very low,” Sakhnova said.

Sales of AvtoVAZ’s Lada brand fell 42 percent year on year in July to 32,426 cars.

Total car sales in Russia fell 58 percent last month compared with the same period a year ago, a slightly worse showing than the 56 percent slump seen in June, according to data from the Association of European Businesses.

The backbone of the country’s rescue package for the auto industry has been a subsidy offered to banks for lowering the price of car loans.

Russian truck maker KamAZ posts $50 mln half-yearly loss

http://en.rian.ru/business/20090813/155798795.html

MOSCOW, August 13 (RIA Novosti) - Russia's largest truck producer KamAZ announced on Thursday net losses according to Russian Accounting Standards of 1.62 billion rubles ($50 million) in January-June 2009.

KamAZ, based in the Volga Republic of Tatarstan, posted a net profit of 2.63 billion rubles ($82 million) in the same period last year.

KamAZ produces more than 30 models of trucks, as well as trailers, buses, tractors and spare parts. It also manufactures engines, power units, and components.

The company has assembly facilities in Poland, Kazakhstan, Azerbaijan, Ethiopia, Vietnam and Ukraine.

KamAZ heavy-duty trucks have won the Paris-Dakar rally on several occasions.

 

New Airline to Start $8 Flights to 4 Cities

http://www.themoscowtimes.com/article/600/42/380645.htm
13 August 2009By Maria Antonova / The Moscow Times

New low-cost airline Avianova will begin flying out of Vnukovo Airport to four Russian cities on Aug. 27, with one-way tickets starting at 250 rubles ($7.70), Avianova director Vladimir Gorbunov said Wednesday.

The airline’s fleet of two Airbus A320 jets will initially fly to Sochi, Krasnodar, Rostov-on-Don and Samara, while Naberezhniye Chelny and Astrakhan will be added within a month, Gorbunov said at a news conference.

“We hope to get two more planes in time for the winter schedule,” said Gorbunov, who was previously an executive at Airbus’ Russia and CIS branch.

Avianova has the first two planes on a five-year lease from the International Lease Finance Corp. They are both 12 years old and were previously operated by US Airways.

Avianova is controlled by Alfa Group and Indigo Partners, a U.S. investment firm, through Russian company Luch. Alfa Group is the ultimate majority shareholder through its investment subsidiary A1, said Andrew Pyne, the founder and former chief executive of Viva Macau, a low-cost carrier in Asia-Pacific, who was introduced at the news conference as a representative of both Alfa Group and Indigo.

He declined to give investment figures, details on the size of the stakes or identify the board directors.

Media reports have suggested that Pyne will run the airline but could not be appointed to the top post because of federal rules limiting foreigners in the domestic airline industry.

A startup like Avianova would need an investment of at least $15 million, but that would cover the “bare minimum,” said Dmitry Baranov, a senior analyst at Finam Investment.

Avianova’s main competition will come from the only other low-cost domestic carrier, Sky Express, and media reports have suggested that Avianova has based its business strategy on its rival’s. Pyne denied that, telling The Moscow Times, “Our business plan is independently constructed and not based on anyone else’s.”

Avianova’s flight schedule is tight, and it might face problems with only two planes, said Sky Express director Marina Bukalova.

“It’s a very risky schedule, even before two more cities are added,” she told The Moscow Times.

Typical service time between landing and takeoff is 40 minutes at Vnukovo, while it can take an hour at regional airports, she said.

Avianova’s web site shows, for example, that the airline has scheduled a 25-minute stop at Vnukovo for a plane arriving from Samara and leaving for Rostov on Sept. 13, while the other plane is in Krasnodar at the same time.

Tickets to the first four destinations became available for purchase online Tuesday night. The base price of 250 rubles is available for about 45 seats out of 180, and the fare increases to 5,000 rubles at the date of departure, said airline sales director Zhanna Shalimova.

The base price does not include airport and booking fees, so the 250 ruble fare will actually cost 623 rubles.

Moody's Interfax assigns Aa1.ru rating to Oblast of Samara's RUB2.4 bn bond

http://www.cbonds.info/all/eng/news/index.phtml/params/id/440647
13.08.2009 - Moody's Investors Service

Moscow, August 12, 2009 -- Moody's Interfax Rating Agency has assigned a Aa1.ru national scale rating (NSR) to the Oblast of Samara's RUB2.425 billion bond (approximately USD75 million), to be issued on 14 August 2009. This senior unsecured amortised bond with a fixed coupon rate is due in May 2013. It will be used to fund the Oblast's budget deficit and strengthen its liquidity position. Moscow-based Moody's Interfax is majority-owned by Moody's Investors Service, a leading global rating agency.

Moody's Interfax notes that the Oblast of Samara's Aa1.ru NSR is supported by the region's historically strong operating balances, moderate debt burden and favourable maturity profile, as well as rapid economic development in the recent past. However, these factors are offset by an expected significant deterioration in the operating balances arising from a recessionary-driven tax revenue decline, coupled with some rigidity on the expenditure side. Nevertheless, Moody's Interfax notes that the Oblast's debt burden, including the new bond issue, will remain moderate.

The last rating action was implemented on 27 June 2008, when Moody's Interfax assigned an Aa1.ru rating to the Oblast's RUB8.3 billion bond.

The principal methodologies used in rating the region are "Regional and Local Governments Outside the US" and "The Application of Joint-Default Analysis to Regional and Local Governments", which can be found at www.moodys.com in the Credit Policy & Methodologies directory, in the Ratings Methodologies sub-directory. Other methodologies and factors that may have been considered in the process of rating these cities can also be found in the Credit Policy & Methodologies directory.

Located 1,098km south-east of Moscow, the Oblast of Samara has a population of 3.2 million people, accounting for 2% of Russia's total population, and contributed approximately 2% to national GDP. The region has a strong industrial base and considerable natural resources, principally oil and gas.