By John Helmer, Moscow

The Fitch ratings agency has issued a downgrade for Sovcomflot, the state-owned tanker group, claiming the failure of the company to privatize and sell shares, planned for this year, is weakening its ability to cover its current debts, as revenues remain under pressure from poor freight rates. But the debt picture is worsening as more than another billion dollars in bills for the new fleet commissioned by chief executive Sergei Frank (image second from right) come due next year, and in 2014.

Sovcomflot has reported that as of June 30 it must repay short-term loans of $253.3 million over the next twelve months, and is carrying longer-term debts of $2.3 billion; the latter figure is up 8% compared to the debt level on June 30, 2011. In its financial report for the first half of this year, Sovcomflot says its Time Charter Equivalent revenues came to $500.5 million, a year-on-year gain of 4%, but net profit fell 21% to $50.9 million.
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by John Helmer - Monday, November 12th, 2012
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By John Helmer, Moscow

Novolipetsk Metallurgical Combine (NLMK), owned by Vladimir Lisin, has done something that no Russian steelmaker is on record as doing in the current downturn for steel production, sales, and profits; nor in the downturns which have preceded – 1991-93, 1998-99 and 2008-09. It is negotiating with steelworkers and their unions before deciding on how to cut costs. There’s a catch — that’s happening in Belgium, not in Russia.

For months there have been public demonstrations in the traditional steelmaking Wallonia (Walloon) region of Belgium, between Liege and La Louviere, 112 kilometres to the southeast. Unions, regional government, political parties of the right and left, and consultancy studies have recommended a variety of options for reviving the steelmills and keeping steelworkers employed in the region; none would cost less than €300 million. There is also sharp local argument over whether the region would be better off in the long run doing without the steelmills.
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by John Helmer - Saturday, November 10th, 2012
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By John Helmer, Moscow

Roman Abramovich was recently able to bamboozle a British judge with no experience of Russia, when the credibility standard was set by Boris Berezovsky. But can his winsome personality persuade President Vladimir Putin and energy chief Igor Sechin that Russia badly needs to acquire an Australian company that has adapted Soviet technology for turning coal into gas; should lend Abramovich up to $2 billion to buy the asset; and maybe several hundred more million dollars to flip the asset to Evraz, the Russian steel and coalmining group which Abramovich’s holding, Millhouse, already controls?

Abramovich’s last attempt at spending a Russian dividend stream on foreign assets was aborted when Evraz withdrew its bid to buy Scaw Metals, a South African steelmaker owned by Anglo American. That deal, worth between $500 million and $700 million, didn’t happen at the same time as Victor Rashnikov was extricating Magnitogorsk Metallurgical Combine from its $560 million commitment to buy Flinders Mining, an Australian iron-ore project.
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by John Helmer - Thursday, November 8th, 2012
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By John Helmer, Moscow

The result of the US presidential election, giving Barack Obama victory in both the popular vote and an even bigger one in the Electoral College vote by state, shows that one traditional rule of thumb still applies — incumbents must be down by a 5% margin in the polls at the end of the party conventions for the challenger to be likely to win on Election Day. This is because far more voters have decided their vote well in advance than they admit to the pollsters, and because they can be shaken from their intention only by October surprises or obvious mishaps. Accordingly, Mitt Romney was bound to fail.
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by John Helmer - Wednesday, November 7th, 2012
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By John Helmer, Moscow

It’s more serious than a case of when the cat’s away, the mice will play.

Arguments over Igor Sechin’s appointment to run the country delayed the announcement of Dmitry Medvedev’s government for several weeks in May. Now that Sechin’s at Rosneft in charge of constructing the most powerful energy-producing and trading platform in the world, he hasn’t had the time to supervise the Russian mining and minerals sector, as he used to do during President Putin’s second term and his prime ministry. In allocating Sechin’s time cost-effectively, there’s no comparison between running Rosneft and sorting out the problems of Norilsk Nickel, Rusal, Urals Mining and Metals, and Metalloinvest.
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by John Helmer - Tuesday, November 6th, 2012
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By John Helmer, Moscow

It happened at the same time in February, when the British Broadcasting Corporation (BBC) was rehearsing members of the Pussy Riot group, recording voice-over of a script against then presidential candidate Vladimir Putin , and fabricating a performance in Christ the Saviour Cathedral for which two members of the group are serving 2-year prison terms, and one is on probation. The BBC has acknowledged “errors” were made by their Moscow correspondent Steven Rosenberg in his compilations and broadcasts about the incident, the prequels and sequels.

This YouTube version of the February 21 incident has recorded 75,110 views. The BBC rehearsal version, posted on February 20, has so far drawn 84,336 views. An extra English-language version has recorded just 3,132 views. And this is the YouTube clip posted by Pussy Riot itself. The views total 2,364,707.
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by John Helmer - Tuesday, November 6th, 2012
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By John Helmer, Moscow

If Russia’s leading oil trader Gunvor can lose its allocations of crude oil from Rosneft and Surgutneftegas in a flash, and Novatek almost a third of its domestic gas sales in another instant, then Gennady Timchenko, a control shareholder of both companies, has some explaining to do in public. That is, if he intends investors on the London Stock Exchange (LSE) to buy shares in another company he controls in the Russian oil and gas business, IG Seismic Services (IGSS).

The answer to that question also helps answer the last question Timchenko was reluctant to answer – is he running away from trouble in Geneva, or running towards trouble in Moscow? Or both?
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by John Helmer - Friday, November 2nd, 2012
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By John Helmer, Moscow

Severstal reconfirmed this week that the control shareholder and executive chairman, Alexei Mordashov, has ruled out buying brownfield projects or loss-making steelmills. The company is not saying, however, whether it will agree to buy from ArcelorMittal parts of the Florange steelmill in northeastern France. Two blast furnaces at the struggling site have been shut down for the past fourteen months, but operations have continued at the downstream hot and cold rolling mills and coating lines, as well as at the upstream coke plant. Full capacity production at Lorange is 2.5 million tonnes per annum.

On October 1, ArcelorMittal announced it intended “to permanently close the liquid phase [blast furnace production of steel at Lorange] and concentrate efforts and investment on the high-quality finishing operation, which employs more than 2,000 employees.” It claimed that 629 jobs would be lost in total. This triggered local demonstrations. ArcelorMittal is also claiming that it will continue to operate part of the Florange complex. “The company is proposing that in the future, slab for the Florange site will continue to be transported from Dunkerque, a world class site, thereby maintaining the industrial chain in France. ArcelorMittal will then focus on enhancing Florange’s position as a centre of excellence for developing high-quality value-added products for its customers, most notably in the automotive industry.”
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by John Helmer - Friday, November 2nd, 2012
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By John Helmer, Moscow

When he was last spotted at his own devices, Ziyavudin Magomedov announced on September 20 that some time in the next decade he and Gazprom intend to build a refinery to convert natural gas into liquefied natural gas (LNG) in bunker form to power a Magomedov fleet of newly designed, newly launched ocean-going ships. Magomedov’s current fleet comprises mostly tugboats with antique power plants, employed for tanker escort at Novorossiysk and Primorsk ports; he has declined to explain where the new fleet would come from, or why. So the announcement appeared to be no more than an advertisement that, in the current scramble for state budget and state bank funds, Magomedov has a powerful ally.

He has now followed with a placement in Bloomberg that he is thinking of making a bid to buy Australia’s GrainCorp, and must beat the takeover bid already on the table from Archer Daniels Midland (ADM) for A$2.77 billion (US$2.88 billion).
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by John Helmer - Wednesday, October 31st, 2012
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By John Helmer, Moscow

In the century-old story of the little boy and the four tigers, the latter force the lad to give up his clothes with threats to eat him, if he doesn’t come across. Then in a frenzy of envy and greed, the tigers chase each other until they turn to butter. Unscathed, the boy takes back his clothes, and his mother turns the tiger butter into pancakes.

In a turn-up for the books, after eight years of litigation in the US and Nigerian courts, pancakes is what the Nigerian government is now making of United Company Rusal. Not ready to take this lying down, lawyers for Rusal have asked the courts of London and Los Angeles to rule again on just who is the tiger, and who the boy in this story.
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by John Helmer - Wednesday, October 31st, 2012
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