Vedomosti
Baturina agrees to sell development empire to repay debts
Yelena Baturina, once Russia’s richest woman, is leaving the development business and selling her Inteco to Binbank co-owner Mikail Shishkhanov and partners.
“Inteco is a good asset, and very valuable in pursuing my own projects. It would have taken me five or seven years to build such a construction holding company from the ground up,” Shishkhanov said.
Baturina, the wife of former Moscow Mayor Yury Luzhkov, has signed an agreement to sell 100% of shares of Inteco and Patriot as well as the industrial assets and development projects owned by these companies, to Shishkhanov (95%) and Sberbank Investments, a subsidiary of Russia’s biggest lender (5%). The $1.2 billion deal will be closed within a month.
However, given Inteco’s huge debt, Baturina will only receive the cash remaining after paying her creditors, a source close to the Inteco management said.
Shishkhanov did not comment on this, but said he was buying the company with his own funds. Inteco’s debt is around $1 billion, owed in equal shares to Sberbank and Bank of Moscow. This suggests Baturina will receive $200 million. She will also keep her foreign assets including resort hotels in Morocco and Austria, a business center in Kazakhstan and a hotel in the Czech Republic.
Shishkhanov said he needs Inteco for the Rublyovo-Arkhangelskoye business estate project he is developing jointly with Sberbank. The 1,000-acre area just west of Moscow he bought in 2007 was intended for a residential and commercial property project. However, the concept has been changed to building a business estate to be part of the International Financial Center.
“Inteco has a professional team, design companies and production facilities,” Shishkhanov said.
Sberbank Investments said Inteco stake is a “good investment.” Inteco has not made any comments.
“Implementing new projects requires substantial investment. Therefore, having received a good offer, we took the decision to sell the assets,” Baturina was quoted as saying.
“Inteco lost the administrative resource of Luzhkov after the former mayor’s downfall last September. After that, the only logical option was to sell,” said Artyom Tsogoyev from Trinfico Property Management.
Baturina said in an interview earlier that she was being pressured to sell out. “They mean business. I can’t say I was unprepared for this. I wasn’t even surprised when people started backing away to avoid going down with us,” she said without mentioning any names.
Inteco has high quality facilities, and it’s no good to anyone if they remain idle. New investors will give a fresh impetus to the company, said Sergey Riabokobylko, partner at Cushman & Wakefield. A source close to Shishkhanov did not rule out a possible rebranding of the company.
Inteco sources said Baturina still owns land and cement plants in Russia. Although other sources hinted she was in talks to sell these too, an Inteco management source claims no deal has been signed.
Kommersant
Egypt loses popularity as holiday destination
Egypt has lost its status of second popular summer holiday destination after Turkey, Kommersant reports, citing its holiday statistics for June 2011. This is the impact of a two-month ban on the sale of package tours to Egyptian resorts following political unrest in the country. The tourist flow may resume in November.
In June 2010, Turkey had 578,500 Russian tourists, Egypt almost 141,300, and Greece, about 80,000. This year the top three destinations are Turkey with 616,000 holidaymakers, Spain with 118,300 and Egypt with just 111,000.
This is a direct result of a two-month ban on tours sales to Egyptian resorts. The restrictions were not lifted until April, with the tourist flow in that month dropping by 65% year-on-year, in May by 45% and in June by 21%.
“The tourist numbers will return to last year’s levels by the November holidays,” says Anna Podgornaya, general manager of the Pegas Touristik tour operator.
Egypt’s February-March closure had a negative effect on Israeli tourist statistics as well. Many people who spend their holidays in Egypt also visit Israel on a day trip.
In February, the number of Russians who spent at least one day in Israel fell by 90% year-on-year (down to 1,200); in March by 98% (down to 500); in April by 76% (down to 5,300); in May by 49% (12,700); and in June by 48% (down to 9,500).
In addition to Egypt, last winter also saw fewer package tours to Tunisia. Its holiday resorts were not opened by Russian regulators until the end of April. This destination is also showing negative growth, as follows from the statistics released by Tunisia’s Tourism Ministry. In May, the tourist flow from Russia slipped by 33% (down to 12,700); by 28% in June (down to 26,000); and by 14% in July (down to 32,300).
Podgornaya believes demand for Tunisian resorts could have recovered much earlier but for the military developments in neighboring Libya.
Turkey – the most popular summer destination for Russians – has shown only a modest rise: in June it was up 6% year-on-year, going up to 616,000 tourists, and up 10% in July, reaching almost 587,000 holidaymakers.
This is evidence of balanced demand and supply, travel agents believe. This year’s declared volume of air traffic to Turkish resorts has met the actual requirements of the airlines so they did not have to slash prices to fill their planes, explains Viktor Topolkarayev, Intourist general director.
On European seaside destinations, on the other hand, tour operators had to slash prices heavily. Like a year ago, with the traditional surplus of air carriage capacity, Greece was among the worst-hit this season, Vladimir Vorobyov, president of the Natalie Tours, stated early in August. He said the tour operators “actually subsidized their clients’ holidays” by selling package tours below cost.
There were also problems with Spain and Cyprus this year, according to tour operators.
Nezavisimaya Gazeta
Putin unveils gas pipeline bypassing Ukraine
On Tuesday Gazprom started pumping gas into the first strip of the Nord Stream pipeline across the Baltic Sea, giving Russia direct access to the European market. Ukraine will be no longer tempted to exploit its exclusive position as a transit country.
Russia-Ukraine cooperation may be further undermined after Russia builds a third strip, if Gazprom convinces its European partners of its necessity.
Putin told Gerhard Schroeder, the former German chancellor and the head of the shareholders committee of Nord Stream’s operator: “President Dmitry Medvedev plans to visit Germany, where he will have a possibility to discuss this issue with the chancellor.”
The prime minister likely said this to stress the Russian leadership’s interest in Nord Stream in view of the possibility of a new gas war with Ukraine. “Ukraine has been our longtime, traditional partner. As with any transit country, they have the temptation to benefit from their position. Now this exclusivity is disappearing, and I believe that our relations will take on a more civilized character,” Putin said.
He said increased gas export to Europe was especially important because Germany has decided to phase out its nuclear power plants after the accident at the Fukushima plant in Japan and to build more gas-fuelled power plants. Putin said “the amount of gas that will be supplied [to Germany] is comparable to the energy produced by 11 nuclear power stations.”
The annual capacity of Nord Stream’s first strip is 27.5 billion cubic meters (970.75 million cu f) of gas. The project was estimated at about 8.8 billion euros. Over 650 km (404 miles) of the second strip has already been laid. After it comes on stream next year, the pipeline’s capacity will double to 55 billion cubic meters and Russian gas deliveries to the EU may exceed 200 billion cubic meters.
Putin failed to convince Chancellor Angela Merkel of the necessity of building a third strip in July. She said nuclear power plants generated 20 GW of the 80 GW of electricity Germany needs and that plants generating 8.5 GW had been shut down. The remaining 11 GW should be generated by renewable energy plants, which Germany intends to double.
Deputy Prime Minister Igor Sechin on Tuesday advocated the necessity of a third strip in view of problems with Ukraine, adding that producers and consumers welcomed direct contacts.
Gazprom CEO Alexei Miller said that Gazprom and its German partners co-own trunk pipelines in Germany but cannot ensure similar ties with Ukraine, which is buying Russian gas cheaper than Poland, Hungary, Turkey and Romania. Russia will supply 40 billion cubic meters of gas to Ukraine in 2011 at a $100 discount per 1,000 cu m, which amounts to a $4 billion of annual subsidies to Ukraine, Putin said.
Analysts say Nord Stream’s commissioning will enhance EU’s energy security. Troika Dialog analyst Valery Nesterov said the pipeline is a serious alternative to the route across Ukraine and a major trump card for the Kremlin.
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