Tax Exemption for Skolkovo Residents in Russia

President Dmitry Medvedev proposed exemption from taxes for residents of the center for commercialization of innovative technologies in Skolkovo (Analogue of USA Silicon Valley in Russia). In particular, the Russian leader offered to exempt residents from income tax and VAT. 

According to the president of Russia, project participants should be exempted from profit tax, VAT, corporate property tax and land tax. Mandatory insurance premiums amount to 14%, tax on personal income will be levied in accordance with the law. The head of Russia stressed that it was "sufficiently serious decision, which is yet to come".

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Cooperation of Russia and Denmark

As part of the state visit of President Dmitry Medvedev and Prime Minister of Denmark Lars Lecce Rasmussen took part in the first Russian-Danish Business Forum, where representatives of leading companies of Russia and Denmark discussed the issues of energy efficiency, reducing consumption of heat and electricity. 

Today Denmark has the world's best energy-saving technologies, moreover, the Danish experience may be applied in Russia, since heating in Denmark and Russia is  centralized unlike the cities of most European states.

First in this process has become an engineering company "Group E4 ", which is most actively pursuing collaboration with the Danes in the field of energy. During the visit, " Group E4" signed several important agreements with the Danish companies, in particular with the company Danfoss A / S. 

Cooperation between the two countries will begin in the Murmansk region. "Group E4" with the Danish company Logstor and the administration of the Murmansk region has already reached agreement on the modernization of heat supply in the cities of Apatity and Kirov.

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Russian Fun - Petrol Seesaw

Oil companies threaten Russian with shortages of automotive petrol. Since the beginning of 2010 the wholesale prices for the high-octane fuel have grown on average by 13%, in the summer the price wave will reach the retail. 

 

Experts think that the Russian Government could suppress the boom by imposing duties on export but so far it limits its efforts to antimonopoly measures only.

The story with fuel price hikes repeats in Russia every year. All sorts of different reasons for the summer price jumps are given: excise duties indexation by the Russian Government, fuel shortages due to the reconstruction of refineries, monopoly conspiracy of oil companies, global "black gold" price rises.

Experts claim that excise duties do affect prices, although insignificantly. In 2010 the rate of the excise duty on high octane petrol amounts to 3,992 roubles per ton. In 2011 it will be differentiated - for one ton of petrol of class 2 and below 4,624 roubles will have to be paid, class 3 - 4,302 roubles, class 4 and 5 - 3,773 roubles. 

According to Mikhail Turukalov, the Chief Editor of the Department for Prices and Regional Markets of the Information and Analysis Centre KORTES, the top "fine" of 600 roubles for the production of "outdated" product and the "bonus" of 200 roubles for the production of environmentally clean fuel are too insignificant to radically change the price of a ton of high-octane petrol.

Russian-American Modernization of Economy

Russian authorities decided to start  modernization of the economy from energy sector. Russia and USA had already agreed priority areas in the high-tech developments of the two countries. General Electric and Dupont supporting the initiative of the commission under the leadership of Dmitry Medvedev and Barack Obama had already agreed to the selected joint projects.

Tomorrow  the Minister of Education Andrei Fursenko together with the advisor of U.S. President John Holdrenom will formally approve key decisions of the working groups. The most promising directions for research and investment will be technology for energy and resource solutions for companies. The program of energy conservation were аnnounced: innovators of the two countries would develop new lighting systems.  

Bilateral Russian-American presidential commission held meetings of subgroups of Fursenko and Holdren, headed by the Presidents Dmitry Medvedev and Barack Obama. The Commission was established in July last year after a meeting of two Presidents in the Kremlin. 

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IPO of Russian Group of Companies Protek

One of the largest Russian pharmaceutical distributors - Protek - today announced the final price of its IPO. Following the collection of bids from potential buyers, it was determined that the company's shares will be sold at 3.5 dollars per unit. But Protek can still achieve the main thing - to attract as a result $ 400 million. 

Based on the demand for its securities, the company defined the volume of placement: to sell 114 million 285 thousand 714 ordinary shares. Proportion of shares in free float after the completion of all procedures (after the IPO will be a closed subscription) will be 20,2%. 

"Successful IPO is a crucial stage in the development of the company, we are very pleased with the reaction of investors to our proposal," - said president of  Protek Vadim Muzyaev. According to him, the esults indicate the confidence of investors in the company's business development strategy in all segments.

As previously reported, part of the funds raised during the IPO, will be aimed at expanding business of Protek, in particular, emphasis will be placed on the development of production. Also planned investments in expanding brand portfolio, mergers and acquisitions, retail development.
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RTS Markets Will BeginTrading at 10.00 AM

Trading on the RTS Group markets will begin at 10:00 Moscow time since May 17.

Such a decision was taken by the Board of Directors of the RTS. Previously, transfer of trading on 30 minutes - from 10:30 Moscow time - was scheduled for late April. Later it was decided to postpone it in mid-May, to give market participants more time to prepare. 

Note that from May 1 to 3 and from may 8 to 10 trading in all markets of the RTS will not be held in conjunction with public holidays. On weekdays on April 30 and May 7 auction markets will work as usual.

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Russia and Oman Enter "Construction Union"

Foreigners demonstrate interest to Russia. Mohammed bin Awad bin Abdul-Rahman al Hassan, the Ambassador of the Omani Sultanate to Russia, has visited the Chelyabinsk Oblast in March 2010. 

Oman is considering the prospects of cooperation with the South Urals in the construction and construction material production sectors. According to Mr al Hassan the Chelyabinsk Oblast is well known in his country as the industrial centre of Russia with rich opportunities for investments. 

At the moment, Insi, a South Urals group of companies, is conducting negotiations on the implementation of an investment project in Oman that provides for the construction of a plant specialising on the production of fast-erect buildings for industry or housing.

At the moment the foreign party is considering which technologies and products from Insi would be in demand and in what quantities. Precise parameters of the project will be decided upon within the nearest two months.

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Peugeot Citroen, Mitsubishi & Volkswagen Plants In Russia

The French Peugeot Citroen and Japanese Mitsubishi launched today a plant vehicles in Kaluga Region in Russia. 

Investments in the project amounted to 470 million Euro. The new venture will produce five models of cars - Peugeot 308, Peugeot 407, Citroen C4, Citroen C-Crosser, as well as the Mitsubishi Outlander XL. These models of C-class are designed for implementation in the Russian market.

Production of a full cycle of the plant will begin in 2012. During this period, annual production capacity will be 125,000 vehicles, including 85,000 sedans and 40,000 four-wheel drive vehicles.

It is worth noting that this is not the first foreign car producing plant in Kaluga. In November 2007 there appeared a factory of Volkswagen. It produces Skoda Octavia, Octavia Combi, Octavia Tour, Octavia RS, Octavia Scout, Skoda Superb, Skoda Roomster, Skoda Fabia, Skoda Fabia Combi, Skoda Yeti, Volkswagen Passat, Volkswagen Passat CC, Volkswagen Tiguan, Volkswagen Golf, Volkswagen Touareg, Volkswagen Jetta, Volkswagen T5, Volkswagen T5 lang, Volkswagen Caddy and the Volkswagen Caddy maxy, Audi A4, A5, Q5, A6 and Q7. 

 In October last year the plant was running full-cycle production of Volkswagen Tiguan and Skoda Octavia. Next week it is planned to start production of a full cycle of updated Skoda Fabia.

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Fitch's BBB Rating to Russian Eurobonds

International rating agency Fitch Ratings assigned Russia's Eurobond rating BBB.  

Government securities will be available in two tranches  with maturity in 2015 and in 2020.  

The total allocation will amount to 5.5 billion dollars, according to a press release agency.

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RZD Approved IPO and Sale of 18 Subsidiaries

The Board of Directors of RZD gave preliminary approval of the sale of 18 subsidiaries' and associates' shares in 2010-2011, said the press service of the company. 

At the same time Directors of RZD approved the IPO of non-controlling (35%) stake od OAO "TransContainer" among Russian and foreign investors. It was scheduled before the end of 2010 depending on market conditions.

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Russia May Increase Eurobonds to 6 Billion

Russia may increase the placement of  Eurobonds to $ 6 billion on a background of good demand from investors, reports Reuters citing a source in banking circles. 

"It is possible that the tranche will be 3 billion dollars (each), such option is being considered. In Europe there is good demand, the same interest is in America," - said the source.

Road-show of Russian Eurobonds started last week and has already passed in Germany, London and Asia and will end today in New York City.  

Tomorrow  the official price guidance will be declared. Limit of Eurobonds for the current year is set at 17.8 billion dollars. As the lead managers there  were selected four banks: Barclays Capital, VTB Capital, Credit Suisse and Citibank.

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New Tax Incentives in Russia

The Government of Russia wants to introduce a number of new tax incentives. Changes will touch companies working in the field of health and education. They will be exempted from income tax until 2020. "For them, tax holidays may last until 2020." - said the Prime Minister Vladimir Putin.

He stressed that it will involve as non-profit as commercial organizations. Moreover, for commercial organizations the latter will be introduced for the first time, because, according to the Prime Minister, "they work in the vital area".
The Prime Minister recalled that the saving energy law was passed. It is proposed to release energy-efficient equipment from property tax for a period of three years.
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Recession Of Russian Economy Is Over

Recession in the Russian economy is over, the Prime Minister Vladimir Putin said when speaking in the Duma with a report of the Government for 2009. "That does not mean that the crisis is over, but the recession kicked the bucket", - stressed the head of the Government. 

The preliminary results of I quarter 2010 evidence the abovesaid: Industrial production rose by 5,8%, while the real incomes of the population - by 7,4%. As Putin said, these results are encouraging. 

The Prime Minister reminded that the GDP growth in 2010 was projected at 3.1% groth, however, he said, it is likely that the GDP growth will be even higher. "The country has a very good starting conditions for moving forward", - said Putin.

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SPO Of Petersburg Construction Company LSR

Petersburg construction company LSR announced SPO (secondary offering) today. Price range of placement is set at 10-11 dollars per global depositary receipt (GDR), or 50-55 dollars per share (equivalent to 5 GDR). 

Volume of placement is 16.04 million shares, which are issued in the form of additional issue. Based on the promulgated price range, LSR Group plans to attract  from 800 to 882 million dollars. As noted in the announcement of the company, the final offer price will be below this range, but may be even higher. 

Goldman Sachs International and J.P. Morgan Securities Ltd. are acting as joint global coordinators and together with VTB Capital  as joint bookrunners.
Funds will be used to finance the development of real estate development activities (land acquisition), to finance the  ongoing construction and capital expenditures for the acquisition of facilities for the production of building materials and other corporate purposes. 

LSR Group was founded in 1993 and operates as a diversified construction company in several complementary market segments. The main activity of the group is production of building materials, construction and development. In 2007 the company held an initial public offering of shares (IPO), selling 12.5% of capital at costs of $ 72.5 per share and U.S. $ 14.5 - per GDR. 

Consolidated net profit of LSR on International Financial Reporting Standards (IFRS) for 2009 amounted to 4.59 billion rubles against more than 8 billion rubles of loss in 2008.

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Bentheimer Holz Starts Production In Russia

Bentheimer Holz (Germany) may start a wood-sawing and pellet production facility in the Perm Krai in Russia. During his visit to the region of Christian Schmitt, the company's Board Chairman, has appraised several potential sites for the construction of a plant.

Bentheimer Holz is prepared to invest about 8 million Euro into the project. The company's experts assess the requirements for the production start-up to be 150 to 400 thousand cubic metres of timber. The current available felling quantities in the Perm Krai being auctioned amount to 4.2 million cubic metres of which 1.5 million cubic metres is coniferous wood.

Mr Schmitt said that Prikamye (lands near the Kama river) meets the requirements of Bentheimer Holz better than other regions of Russia, all the more so since the profit tax has been reduced to 15.5% here.

Bentheimer Holz has been operating in this market for over 40 years. This company is one of the largest in Germany in timber logging and processing. The company specializes in  production of renewable energy sources, pellets, briquettes, and pallets. Germany, Scandinavia, France, and the Netherlands are the key sales markets for these products. The company processes about 500 thousand cubic metres of timber annually.

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Moscow Real Estate Market Recover

Moscow real estate market seems to have recovered. According to the newspaper RBC daily, due to pent-up demand and revive of the mortgage market in the first quarter of 2010 in the capital of Russia there was a record number of deals over the past 4 years. 

3 months of 2010 moscovites signed by almost 10% more transactions in flats than for the same period the pre-crisis 2007.
According to experts, housing market in Moscow returned to a stable demand, which was also reflected in the continuous increase in mortgage transactions. In March of this year apartments bought with mortgage amount to 1609 against 249 apartments in March 2009. 

Market analysts believe that buyers, who were waiting when the price reached the maximum reduction came on the market, realizing that further price reductions will not be afraid of their future growth.

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Asian Interest In Russian Eurobonds

Asian investors have shown great interest in Russian Eurobonds in the road-show, held at the Asian sites, told  a source familiar with the process of road-show. "I know that everything is normal. There is great interest and great attention. But we still believe that the main investor is still in the USA," - he said. 

According to the source, Asian investors mostly focuse on their national borrowers as well known for its own debt instruments. He also noted that, according to the market conditions, the volume of the first tranche of Russian Eurobonds can be more than 3.5 billion dollars. 

Meanwhile, Reuters news agency reported today, citing a source in banking circles that Russia could issue securities on $ 5 billion in two tranches with a term of 10 and 20 years. "This information comes from traders," - he stressed. In turn, a source close to the deal, added that there are no information on the precise parameters of the issue yet.

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Sberbank Reduces Rates

Sberbank following the retail loans will reduce rates on corporate loans from next week , the head of Russia's largest bank German Gref said at a briefing on Friday. 

"We will reduce rates on corporate loans, for the most part - from next week", - Gref said, adding that this applies only to new loans, and previously given  loans "are a subject to negotiation."

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