VSMPO-Avisma Will Increase Production Output By 20% In 2011

In 2011 VSMPO-Avisma Corporation will increase the amount of investment in production growth up to $250 million. It is half of the amount intended for investment in renovation by the corporation management till 2015.

As it was stated by Mikhail Voevodin, General Director of VSMPO-Avisma, implementation of many investment projects was intentionally postponed till 2011-2013. Most likely, their revival has been triggered by the Russian government's order concerning establishment of the Titanium Valley, a special economic zone, in the Sverdlovsk Region, with VSMPO-Avisma taking the key role. The corporation is planning to invest $100-150 million in the special economic zone project.

VSMPO-Avisma's press service informed that in 2010 the corporation shrank its credit portfolio by $100 million. The second half of the past year witnessed an increase in orders for the products made by the monopoly manufacturer of Russian titanium.

Mikhail Voevodin anticipates that the corporation's production output will increase at least by 20% in 2011 as compared to 2010, thus making it possible for VSMPO-Avisma to regain its before-crisis production levels. 

Based on the official records, over January-September of 2010 the corporation's after-tax profit amounted to 384.75 million rubles at the operating revenue totaling 17,771 billion rubles.

German Douglas Holding Sold Its Russian Network To Rive Gauche

German company Douglas Holding AG retailer of perfumes, cosmetics, books and jewelry, sold its business in Russia - perfume Network LLC Douglas Rivoli to the cosmetic network Rive Gauche developed by PS Group, the company Douglas Rivoli reported. 


The transaction (amount was not disclosed) was completed by 30 December 2010. 


The German company as a whole appreciated the activities in the Russian market, but noted that achieving market leadership in Russia requires a significant investment.  The company also noted the high level of rent for premises in Russia. 


Estimating these factors, the company decided to sell 32 stores Douglas Rivoli, with annual sales of EUR 55 million to the network Rive Gauche. 


The company notes that the network will operate under the former name for the next three years in accordance with license agreements.

Groupon Attracted $1 Billion By IPO

The American Internet company Groupon providing services in the field of online retailers, has completed the process of raising funds through private placements of shares in the amount of 950 million dollars to raise funds and repurchase shares from a number of former investors and to continue business expansion of Groupon outside the U.S. 


New investors are private individuals and various companies, including the Russian Mail.ru Group. Financial advisor for placement was the company Allen & Company LLC. 

VEB Will Hold On 12-14 January Road-show of Eurobonds In Swiss Francs

 State Corporation "Bank for Development" (VEB) will hold on 12-14 January 2011 road-show of Eurobonds denominated in Swiss francs, a source in banking circles of Russia told to RIA Novosti. 

VEB appointed the organizers and book-runners of possible issue of Eurobonds in Swiss Francs in the volume of benchmark Barclays Capital, BNP Paribas , - said the source.
According to the source meetings with investors will be held on January 12 in Geneva, 13 - in Zurich and 14 - in Lugano.

Personal Legalization Of Foreign Employee Working In Russian Company

Below we speak about the situation when a foreigner has an intention to be employed long-term by a Russian company.

To stay and to work legally in Russia every foreign employee  should obtain a work visa, which is issued only on the basis of a work permit. Work permit can be obtained only after the company has got an employment permit. 

Below is a step-by-step procedure (all steps are essential):

1. Company obtains employment permit in Federal Migration Service

(Obtaining of Employment permit (stages 1) and registration of the company at PVU GUVD of Moscow (stage 3) can go simultaneously if the director of the Company is a Russian citizen. If not, the order is as stated above)

2. All foreign employees obtain work permits in Territorial Migration Service

3. Registration of the company at Passport and Visa Department of Moscow (if it is not registered yet)

4. Applying to PVU GUVD of Moscow for obtaining work invitation

5. Applying for 3-month single entry work visa to the Russian                  embassy abroad

6. Obtaining a multiple entry work visa for a year and its registration

The company can invite foreigners on its behalf only if the company is registered with Passport and Visa Department of Moscow. It is absolutely essential that the Employer-Company named in the work permit of the foreign citizen should be the inviting company named in the visa. 

Working in Russia on a basis of a business visa issued by some Russian commercial organization that is not the Employer is a breach of Russian legislation. Sanction is penalty. Worst case scenario is deportation.

Total time needed for a foreigner to enter Russia and legally work is 3.5-4 months (standard term) or 2.5-3 months (speed up term). Provided that a company is already registered in PVU GUVD of Moscow.

Representative Office Or A Branch Of Your Company in Russia

Foreign individuals and legal entities have right to participate in establishment of business partnerships and companies  in Russia or to acquire a share in the registered capital or shares in established legal entities. 

A foreign legal entity may open on the territory of  Russia  its  representative office or a branch. 

Relationships concerning the state guarantees for foreign investors' rights while investing on the territory of  Russia are regulated by the Federal Law № 160-FZ "On Foreign Investment in the Russian Federation" dated 9 July 1999.

A representative office of a foreign legal entity

It is a separate subdivision which does not assume either property or personal non-property rights and cannot be either a claimant or a respondent in court. A representative office is always located on the territory of Russia where it represents and protects interests of a foreign legal entity and does not carry out independent industrial economic activities.

A branch of a foreign legal entity 

It is created for the purposes of carrying out those activities  in Russia which are carried out by the parent organisation abroad  and is liquidated on decision of a parent organisation. 

State control over establishment, activities, and liquidation of a branch is effected by its accreditation in accordance with the procedure determined by the Government of the Russian Federation.

IPO of RTS Stock Exchange

RTS Stock Exchange  plans to conduct additional issue of ordinary shares in an amount of 47.9 million units under the IPO, which would increase the share capital by 29.9%. 

RTS plans to split shares, in which each security with the nominal value of 100 rubles will be converted into 100 ordinary shares with par value of 1 ruble. As a result, the number of authorized common shares will increase to 160 million units.
The authorized capital of RTS will be increased through the placement by public subscription of new ordinary shares in an amount of 47.999 million units. 


Shareholders of the RTS, the holders of ordinary shares will have a preferential right to purchase the additional shares in proportion to the number of their ordinary shares.

Moscow Will Sell Vnukovo Airport In 2011

Moscow authorities are going to sell their shares of the foowing companies: Vnukovo Airport, the International Trade Centre (ITC) and the company Gostinyi Dvor in 2011,  Mayor of Moscow Sergei Sobyanin said at an operational meeting.

This year Moscow authorities will increase revenues from the sale of state assets compared with 2010 by 14 times.

In addition to the above mentioned, Moscow plans to sell stakes in such well-known companies as Capital Insurance Group, Mospromstroi, Komkor, Obyedinennye Konditery.

"We also plan to privatize the stock of the factory AMO-Plant, and a number of objects that are located in other subjects of the Russian Federation ", - the Mayor said. He also recalled that Moscow today owns 433 stocks of different companies. 200 of them are preparing for privatization.

Mail.ru Group and Goldman Sachs Invested In Facebook $500 Million

Russian internet company Mail.ru Group (formerly Digital Sky Technologies) and the U.S. banking group Goldman Sachs have invested in the social network site Facebook $ 500 million. Goldman Sachs invested $450 million, and the rest  invested Mail.ru Group, Associated Press informed referring to the newspaper "The New York Times".


Neither a U.S. bank, nor the Russian company and Facebook give comments on this deal. It is noted that Mail.ru Group had already invested about half a billion dollars on Facebook. In addition, Goldman Sachs has the right to sell its stake in the social network of up to $ 75 million in favor of Mail.ru Group.

IPO of Groupon

The company Groupon (offering through the internet coupons for discounts at restaurants, shops and services of local companies) plans to hold an initial public offering (IPO) on the stock exchange before the end of 2011, reports The New York Times citing informed sources. 

According to the publication, a successful startup is now increasing capitalization, extends the list of investors and rejects proposals from larger companies. Groupon is simultaneously negotiating with financial advisers, preparing for public listing of its shares in 2011.
Groupon plans to sell shares at 31.59 dollars per share, which allows to evaluate a company in the amount of from 6,4 to 7,8 billion dollars, depending on the number of outstanding shares, according to research firm VC Expert, specializing in the evaluation of private companies. 


Annual revenue of Groupon is according to various estimates from $500 million to $ 2 billion. According to the head of Groupon Russia Elena Masolova profitability of this service in Russia is already several hundred thousand dollars.
Experts call Groupon one of the most successful and fastest-growing Internet startups. Among its investors there is the fund DST Global, whose president is the head of the company Mail.Ru Group Yuri Milner. The Fund owns 5,1% of Groupon. 


Groupon may cause excitement on the Stock Exchange. "Investors are considering  this  company to be a business, which in future will cost much more," - he said.