MOSCOW, March 23 (RIA Novosti) Gazprom loses powerful European lobby/ Transdnestr considers integration into Russia/ Aeroflot set to buy Czech Airlines/ Renault may block additional issue of AvtoVAZ shares
Kommersant
Gazprom loses powerful European lobby
The resignation of Hungarian Prime Minister Ferenc Gyurcsany, which is due to be announced today, came as an unpleasant surprise for Moscow. Of all the European politicians, Gyurcsany was one of the most active advocates of the South Stream pipeline project.
The drop in European political support for the Gazprom-initiated project, along with the monopoly's tight financial situation, could tangibly slow down the project's implementation.
"South Stream has, among other things, a political goal of torpedoing the EU's Nabucco plan," said Mikhail Krutikhin, a partner in Moscow's RusEnergy Consulting.
"Gazprom's Blue Stream was built for a similar purpose, to counterbalance another European pipeline project, Baku-Tbilisi-Erzurum. However, the link to Erzurum was laid anyway, and Blue Stream has insufficient traffic," the analyst went on.
To date, preparations for construction of South Stream have cost the Russian gas giant several billions of dollars. Meanwhile, most analysts question the economic feasibility of gas routes bypassing Ukraine, Belarus and Moldova.
"Gas production is falling in Russia, not growing, and new pipelines are designed to take some of the load off the old ones, and not to ship some hypothetical "new" gas," Krutikhin said.
"It could be more profitable for Russia to make deals with the transit countries, even to make concessions, than to replace them with Germany and Bulgaria," he added.
Former German chancellor Gerhard Schroeder spared no effort in promoting Nord Stream, another Gazprom-led project to lay a pipeline across the Baltic Sea, despite his EU colleagues' pressure. His loyalty was rewarded with a top position with a Gazprom-affiliated company along with handsome compensation.
It is possible that Gyurcsany will follow in his tracks. A top position at South Stream AG, registered by Gazprom and Italian ENI on January 18, 2008, in the Swiss region of Zug, is still open. Gazprom CEO Alexei Miller offered the job to Romano Prodi last April, but the former Italian prime minister who lost his post after early elections tactfully declined.
Hungary's prime minister, who resigned after facing mounting criticism over his government's handling of the country's economic crash, might prove more accommodating.
Nezavisimaya Gazeta
Transdnestr considers integration into Russia
When the presidents of Russia, Moldova and Transdnestr signed a trilateral declaration on the settlement of the Transdnestr conflict in Moscow, many analysts concluded that Russia was ending its peacekeeping mission there.
However, Igor Smirnov, president of the self-proclaimed republic, has assured the newspaper that Russia will not pull out of the republic, which may be integrated into Russia.
Relations between Transdnestr and Russia have experienced somewhat of a renaissance, Smirnov said. Moscow is actually guaranteeing the political and economic viability of the republic where every third adult is a Russian national.
Acting on the instructions of the president, the Russian government is considering the possibility of issuing a $200 million loan to help the republic's industrial plants, which are not working to capacity because of a blockade on the republic and the global economic crisis.
The Russian Security Council is due to consider in the near future several issues related to Transdnestr.
The breakaway republic is not discussing with Moldova the possibility of reunification, but ways to normalize relations between two neighboring states.
"In fact, we will become Russia's Transdniestrian region," Smirnov said. He said Russia's leadership had a "very positive" attitude to Transdnestr, and that he thought the outlook was better under President Dmitry Medvedev than it was under Vladimir Putin.
Transdnestr is also pinning hopes on possible improvements in Russia's relations with the United States.
"In one of their documents written under [President Barack] Obama, the Americans describe Transdnestr as a zone of Russian influence," the republican president said. "In other words, they recognize Russia's right to monitor developments in the former Soviet republics."
"I have a reason to believe that the Russian scenario is not the least important," Smirnov said. "Medvedev clearly showed by his example concerning [Georgian President Mikheil] Saakashvili that the aggressor will be rebuffed."
Kommersant
Aeroflot set to buy Czech Airlines
On Monday, Aeroflot, Russia's largest airline, will join a tender to buy a 91% stake in Czech Airlines (CSA) going up against powerful rivals, including an Air France - KLM alliance which is reportedly offering up to 200 million euros for the Czech flag carrier.
Although Transport Minister Igor Levitin said he doubted the need to bid in the tender, analysts believe Aeroflot's chances are good.
A source close to Aeroflot said the bidding price would be determined after the bidders' due diligence evaluation of CSA. The tender commission will select the best bidder offering the highest price in September. The Czech Government wants the winner to retain CSA's flag-carrier status and to invest in Prague airport's development program.
Off-the-record reports say there are ten bidders. A partner of Aeroflot and CSA in the Sky Team - Air France - KLM alliance is so far the only official bidder.
Members of the Aeroflot board from the National Reserve Corporation and its chairman, Transport Minister Igor Levitin, doubt whether acquiring CSA is required. A source close to Aeroflot previously admitted that the airline would not bid, unless Levitin was convinced.
Analysts say Aeroflot would profit from the CSA purchase. Unlike many other European companies, CSA earned 18.8 million euros in 2008.
Oleg Panteleyev, chief analyst at the aviation consultancy firm Aviaport, said Aeroflot's possible success depended on specific terms for financing the deal, and that the state was unlikely to provide direct financial support.
Boris Rybak, head of the Infomost aviation consultancy, said Aeroflot had a good chance of winning the tender because it was among the few international air carriers to post profits in 2007 and in the crisis-ridden 2008.
Vedomosti
Renault may block additional issue of AvtoVAZ shares
Renault could try and block the Russian government's plan to issue additional shares in order to help Russia's largest carmaker, AvtoVAZ. The French company does not have the money for this, and has no desire to tolerate the dilution of its stake in AvtoVAZ.
The Russian carmaker wants to get 26 billion rubles ($778 million) from the state, but state guarantees, which have been stipulated at 10 billion rubles per automaker, are insufficient. To help the company, the government is considering an additional share issue, which will entail increasing the market value of the Russian Technology Corporation, which holds a 25% plus one share stake in AvtoVAZ.
First Deputy Prime Minister Igor Shuvalov said the company's shareholders, including Renault, would have an opportunity to contribute funds during the additional share issue.
However, this mechanism is not to the French company's liking.
Christian Esteve, a member of Renault's Management Committee in charge of its Russian division, said the idea was brilliant theoretically, but Renault as a shareholder would not be happy with the dilution of its stake in AvtoVAZ.
He said the French company supported government assistance, but the issue of an additional share issue "should be considered thoroughly and in detail." Esteve said Renault did not have any plans to inject money directly into AvtoVAZ.
Renault owns a blocking stake in the Russian carmaker and could therefore stop the additional share issue.
The Russian Technology Corporation has refused to comment, while a spokesperson for AvtoVAZ said the additional share issue was one of several assistance plans currently being discussed in the government.
Shuvalov said the government could find "other ways of making AvtoVAZ debts manageable."
Renault bought a blocking stake in AvtoVAZ last year for $1 billion. It lost 117 million euros last year due to the revaluation of the Russian company, whose current capitalization is $285 million.
Yelena Sakhnova, an analyst with VTB Capital, said the stake in AvtoVAZ secured the French company a share in the Russian market, and so the Russian authorities may still convince Renault to allow an additional share issue. They could agree on the issue of preference shares, but AvtoVAZ already has 25% of them, the limit set by legislation.
Sakhnova said Renault could pay for the additional share issue with equipment or technology.
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