By John Helmer, Moscow

It’s been three years almost to the day since Vladimir Putin (left), then Russian Prime Minister, visited the Gremyachinskoye potash mine in southwestern Volgograd region.

The mine, the newest in construction in Russia, with one of the country’s largest potash reserves, and one of the most costly ever to be built, is owned by Eurochem. This nitrogen, phosphorus and potash fertilizer company is already, the company’s website proclaims, number-1 in Russia, number-3 in Europe, and number-10 in the world. According to its owner, Eurochem aims to be number-5 in the world once Gremyachinskoye starts operating. Eurochem is 92.2% owned by Andrei Melnichenko (right), who is also chairman of the company board. But Melnichenko was nowhere to be seen when Putin visited his property. Instead, Putin was hosted by Eurochem’s chief executive Dmitry Strezhnev. He is Melnichenko’s placeman. Strezhnev owns 7.8% of the Eurochem shares through an offshore equity and trade proceeds scheme which Melnichenko controls in Cyprus, the British Virgin Islands, and Switzerland.
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by John Helmer - Wednesday, July 24th, 2013
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By John Helmer, Moscow

Moe (Moses Horwitz) of Three Stooges fame stuck his fingers so often in Curly’s (Jerome Horwitz) eyes, it was Curly the audiences loved — until he died of too much drinking and eating. No chance that if Russia’s President Vladimir Putin keeps giving French President Francois Hollande the two-fingered, two-eyed poke, the audiences will fall for the latter, or that Hollande’s fate will be as ignominious as Curly’s. This time the audiences prefer the Moe character. But what exactly has Hollande done, and keeps doing, that he deserves Putin’s eyeball treatment?

The first of Putin’s pokes at Hollande was the award in January of this year of a Russian passport and an apartment on One Democracy Street, Saransk, for Gerard Depardieu. This was followed in February by Hollande’s first visit to Moscow when he and Putin pretended to be businesslike, and Hollande dropped his regime-change talk, at least his earlier support for the overthrow of Putin himself. It’s quite clear that Hollande has struck the Russians as a duplicitous hypocrite. But it’s just as clear that he is so feeble domestically that it’s the French who are giving him the double-eyed poke. His approval rating (Ifop measurement) was 26% in June; last week it was 27%. No French president has proved to be so deeply and widely unpopular so quickly.
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by John Helmer - Monday, July 22nd, 2013
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By John Helmer, Moscow

Following last week’s report on the stockpiling of aluminium belonging to United Company Rusal, a source close to the London Metal Exchange has written to say he recalls a similar scheme for storing Russian aluminium in Estonia a decade ago. He reports that the warehouse used was located in Tallinn and had been known as Albatros Warehousing. By the start of 2000 Albatros Warehousing was in trouble with the LME and in the UK High Court. “During the late 1990s-early 2000, Albatross was a private company in Tallinn. It seems to have disappeared (perhaps acquired) in the early 2000s. They used bright orange in their logo, and it was very recognisable.” By May of 2000, the LME delisted Albatros and ordered its aluminium transferred to other warehouses.

by John Helmer - Sunday, July 21st, 2013
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By John Helmer, Moscow

A decision this week by the Kremlin to raise duties on imported pipes from the Ukraine will hit Interpipe, the heavily indebted pipemaker owned by Victor Pinchuk (left), particularly hard as it faces debt default negotiations with the Ukrainian government, headed by Victor Yanukovich (right), and with a syndicate of European banks. The Fitch ratings agency has warned that if Interpipe’s export revenues fail to meet Pinchuk’s projections as a result of the curtailment of the Russian trade, the company faces a downgrade, and the cost of its debt service will rise sharply.

Following a meeting with Russian steelmakers on Tuesday, Prime Minister Dmitri Medvedev revealed that as a stimulus measure for local producers of steel strip and pipes, the government has decided to raise import duties and restrict the inflow of imported Ukrainian pipes. “I have decided not to extend the quotas for the supply of Ukrainian pipe products in the last six months”, Medvedev said, endorsing the view of the domestic pipemakers that Ukrainian pipemakers are unfairly undercutting the price of pipes on the Russian market.
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by John Helmer - Thursday, July 18th, 2013
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By John Helmer, Moscow

The share price of United Company Rusal, the Russian state aluminium monopoly, has again dropped below the three-dollar (Hong Kong) level, and is heading towards oblivion – that’s the Citi Bank forecast of HK$1.80. In London and Moscow the market calculation is that, despite the company’s announced cuts to production of aluminium, Rusal’s second-quarter sales, revenues, costs, profit and loss to be released shortly, will reveal a worsening picture.

Just how much worse the share price can get Rusal insiders realize at Moscow headquarters. That’s because they say that a very large volume of metal Rusal has produced, reported as exported and sold, is stocked in a warehouse beside the Baltic Sea. Only this aluminium hasn’t really been sold – it has been hidden by Rusal and its chief trader, Glencore. A company source said the number is so secret that only chief executive Oleg Deripaska (image right), Glencore chief executive and Rusal board member Ivan Glasenberg (left), and a handful of others know it.
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by John Helmer - Tuesday, July 16th, 2013
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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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