By John Helmer, Moscow

An attempt by Siberian Anthracite, a little known Russian coal producer, to list and sell its shares on the London Stock Exchange (LSE) collapsed today, just hours after Reuters reported the sale was going ahead. According to the report from the Reuters Moscow Bureau, the initial public offering “has been subscribed by more than 50 percent, two market sources said on Thursday. Sibanthracite set a price range earlier in July of between $7.00 and $9.50 per global depositary receipt (GDR) for the share issue. The order book is expected to be closed later on Thursday, with final pricing announced on Friday.” No reporter byline was published with the despatch.

The Reuters claim intimated that the Russian company would start with a market capitalization on the LSE of about $850 million. Four banks were the promoters — JP Morgan, Morgan Stanley, Raiffeisen Bank International, and Sberbank.
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by John Helmer - Friday, July 12th, 2013
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By John Helmer, Moscow

According to the announcement issued yesterday in Moscow, Ahmad Mohamed Al-Sayed (centre), head of the Qatar emirate’s sovereign wealth fund, was appointed by Kirill Dimitriev (bottom right), head of the Russian Direct Investment Fund (RDIF), to join the RDIF international advisory board. An application by Dmitriev for several billion dollars of Qatari money is being discussed with Al-Sayed. The text of the official announcement can be read here.

In his preparation for al-Sayed’s appointment, Dimitriev was asked to clarify what account he took of Qatar’s financing the overthrow of the Syrian Government and the military threats facing Russian ground and naval forces in that country; whether Dmitriev believes Qatar to be at war with Russia in Syria; and what conditions Dmitriev has discussed with the Russian General Staff in order to collect the Qatari money Dmitriev has asked for. Maria Medvedeva, once a CNN television producer and now Dmitirev’s spokesman, replied: “I was slightly surprised by the question, because we are an investment fund and have nothing to do with politics.”

by John Helmer - Thursday, July 11th, 2013
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By John Helmer, Moscow

When you are between the hammer of the Nigerian Navy and the anvil of the Nigerian Government, what is a Nigerian judge to do, if not make a very public show of doing nothing?

In a new hearing in a Lagos court yesterday, Nigerian judge James Tsoho (centre) repeated the pattern of his predecessor, Judge Okechukwu Okeke, and again postponed the trial of the crewmen of Russian security tender, Myre Seadiver, this time for another three months. The judge is caught between Nigerian government officials embarrassed but too weak to drop their charges of illegal port entry and arms smuggling, and Nigerian Navy officers strong enough to arrange the arrests of the crewmen and vessel on trumped-up charges, and protective of the Navy’s sideline business of selling vessel security service in Nigerian waters. Pirates in uniform are what this story has been about from the beginning, as one click will illustrate.
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by John Helmer - Thursday, July 11th, 2013
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By John Helmer, Moscow

Sovcomflot, the state-owned Russian fleet operator, intends to sell a 25% bloc of its shares on the New York Stock Exchange (NYSE), according to a leak to Moscow business newspaper Vedomosti this week. However, the source identified as “close to the board of directors” does not know for how long the intention will be delayed by government ministers and chief arranger, Deutsche Bank.

Former Sovcomflot board chairman and currently First Deputy Prime Minister, Igor Shuvalov, announced his backing for the NYSE listing on a visit to the exchange last December. But Kremlin rules require privatization of state-owned shares to be launched also on MICEX, the Moscow stock exchange.
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by John Helmer - Tuesday, July 9th, 2013
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By John Helmer, Moscow

What is a bonus worth if it’s a promissory note for a value that is sinking towards zero in the short term, and cannot be converted to cash or dividends for years? How much loyalty would a zero-value note be expected to attract?

On July 4, Rusal disclosed to the Hong Kong Stock Exchange that it has devised a plan to give shares to company employees for the purpose, the company release claims, “of increasing the employees’ commitment to achievement of the Group’s strategic goals in implementing of the production system.” The plan is for Rusal to buy 0.05% of the 15.2 billion Rusal shares outstanding; that’s 76 million. As Rusal’s share price slips below the HK$3 level, and its market capitalization falls below US$6 billion, it would cost the company US$29 million in cash to fill the employee stock fund to its maximum authorized number. But Rusal says Oleg Deripaska, the chief executive, is going to start the fund off himself at something less than the maximum “The Company currently intends to finance the Plan by applying the internal funding which is available after the CEO voluntarily declined his bonus for the year 2012.” According to Rusal’s financial report for 2012 (page 42), Deripaska’s salary, allowances, benefits in kind, and “discretionary bonuses” came to US$5.536 million. The financial report doesn’t indicate precisely how much of this was in the form of cash, how much in airplane flights to non-business destinations, and how much in bonus cash. The report does claim that Deripaska received 417,266 bonus shares worth at vesting (November 21, 2012) just $274,000.
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by John Helmer - Friday, July 5th, 2013
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By John Helmer, Moscow

Swiss and French financial police have searched offices or homes in France as part of what the spokesman for the Swiss Attorney-General calls “our Uzbek case”. According to Jeannette Balmer, “perquisitions [searches] have been made in France on our request.” She declines to say when the searches were conducted, the addresses of the premises searched, or the names of the Uzbek targets. A report by Ola Westerberg of the Swedish news agency Tidningarnas Telegrambyra first revealed the French operation on July 2.

According to Westerberg, searches by the Brigade de Recherche et d’Investigation Financière were conducted simultaneously at different French addresses on June 18. The targets, according to Westerberg, were all connected to Takilant, a Gibraltar front company allegedly used to take bribes from TeliaSonera, the Swedish telecommunications group, in return for operating concessions and mobile telephone licences in Uzbekistan. Behind Takilant is alleged to be Gulnara Karimova, the front-running candidate to succeed the current President of Uzbekistan, Islam Karimov, her father. For the runup to the June 18 operation in France, read the archive here.
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by John Helmer - Thursday, July 4th, 2013
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By John Helmer, Moscow

The attempt by the Evraz steel group, owned by Roman Abramovich and others, to sell its South African steelmaking asset, Highveld Steel & Vanadium, for double its market value appears to have failed. The deadline Evraz had earlier announced for closing the deal with a South African front company called Nemascore expired on June 30. On July 2, Tatiana Drachuk, the Evraz spokesman, added: “The market will be informed if any decision is taken.”

In March Evraz said it had accepted an offer of $320 million for its 85.12% stake in Highveld. At the time the market value of this bloc of shares on the Johannesburg Stock Exchange was the equivalent of $112 million. The offer triggered a sharp rise in Highveld’s share price, but it has since fallen by several degrees. The current market capitalization of the company is $180.3 million; the Evraz stake, $153.4 million.
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by John Helmer - Tuesday, July 2nd, 2013
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By John Helmer, Moscow

A spate of advertisements for an initial public offering (IPO) of shares, accompanying several rouble bond issues, makes the Lenta hypermarket chain of St. Petersburg appear to be diversifying its investor base with promises of strong growth and a wager on rising Russian consumer spending. In fact, Lenta’s largest shareholder, the US investment fund TPG, is quietly attempting to sell out of the company with the pitch that if a new stakeholder doesn’t hurry with his cash to the negotiating table, the price will be much higher later on.

The ploy, already recognized by investment banking sources in London and Moscow, is a new twist on Russian corporate attempts at placing shares on the London Stock Exchange (LSE). It has the advantages of concealing the company’s financials before they are expected to worsen; and of avoiding the accountability and governance rules demanded by the UK Listing Authority. There’s one catch, though – Lenta and TPG wouldn’t be playing this game unless they have something to hide, and no genuine buyer for their shares.
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by John Helmer - Tuesday, July 2nd, 2013
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By John Helmer, Moscow

A three-judge panel of the UK Court of Appeal has unanimously dismissed a claim by the Sovcomflot subsidiaries, Intrigue Shipping and Novorossiysk Shipping Company (Novoship), for court and legal costs against former fleet charterer Yury Nikitin (second image). Endorsing the earlier judgements of High Court Justice Andrew Smith, the new ruling says the dishonesty of Sovcomflot and its chief executive, Sergei Frank (third image), in making their case against Nikitin balances Nikitin’s dishonesty in conducting his business with the group. For that reason, the Court of Appeal has decided the fair outcome must be that each side should pay its own legal expenses. In addition, for the cost of reaching this conclusion all over again, Nikitin — says his lawyer — has won the appeal court’s order that Sovcomflot should pay his lawyers’ charges.

Sovcomflot has yet to issue an official response to the new judgement, which was decided early in the month and released publicly in London last week. Until now Sovcomflot’s financial reports have been claiming “it is possible that further assets may be recognised in the future in relation to the outcome of the Intrigue [Novoship] costs appeal.”
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by John Helmer - Monday, July 1st, 2013
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By John Helmer, Moscow

The Russian government’s competition watchdog is waiting for state tanker company Sovcomflot and gas exporter Novatek to clarify exactly what plan they have decided on for liquefied natural gas (LNG) shipments from Sabetta, Russia’s newest gas export outlet on the eastern shore of Yamal and the Kara Sea. Sovcomflot said last week it has signed with Novatek an undertaking to cooperate on a feasibility study of two tankers for shipment of LNG, once Novatek launches shipments from its Yamal gasfield and refinery in three to four years’ time.

A press release from Sovcomflot said that state-owned lender Vnesheconombank (VEB) “is to look into the possibility of financing the construction of two ‘pilot’ liquefied natural gas carriers for the Yamal LNG project. Sovcomflot has confirmed its interest in operating the new vessels as a bareboat charterer and technical manager.” According to Sergei Frank, Sovcomflot’s chief executive, “we are confident that our long-standing experience of Arctic shipping…will ensure we cope successfully with the task of providing uninterrupted LNG transportation, in the challenging climatic conditions of the Yamal Peninsula.”
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by John Helmer - Wednesday, June 26th, 2013
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