Putin:Business must return from “offshore shadows”

Putin:Business must return from “offshore shadows”

Prime Minister Vladimir Putin has decried the illicit use of offshore structures by Russian state businesses to spirit cash out of the country and ordered them to return from the “offshore shadows”. The comments  mark his clearest indication to date of concern that accelerating capital flight is being partly driven by corrupt schemes run by managers at state businesses. Net capital outflows totalled $74 billion in the first 11 months of 2011. “It’s time to put an end to the offshore legacy of the era of wild privatisations,” Putin said, referring to the state selloffs of the 1990s that created instant fortunes for Russia’s business ‘oligarchs’ who shifted their wealth abroad.

The wide-ranging nature of Putin’s comments is likely to raise concern among publicly traded firms in sectors such as metals and mining, telecommunications, power, real estate development and retail that are owned via offshore structures. The companies counter that they prefer to base themselves offshore because they cannot get adequate redress in the Russian courts and consider the protection of property rights at home to be inadequate.

Russia allows coal mining to resume in key Siberia region

Russia’s Emergencies Minister has granted permission for coal mining operations in the Kuznetsk Basin to restart after they were halted following a strong earthquake in southeastern Russia, a Ministry spokeswoman has said. SUEK, Russia’s largest coal miner, said its open- cast mines were operating normally following the earthquake that caused it to suspend operations at its sub-surface mines. A company spokesman was unable to comment on the stoppage’s effect on overall volume output.


Terms set for Uranium One’s Russian bond offering

Canadian miner Uranium One has negotiated the commercial terms for a five-year Russian bond offering worth $463.5 million. The ruble-denominated bonds, which will be the first to be issued by a foreign-listed company in the post-communist Russian Federation, will be traded on Russia’s MICEX exchange. The interest rate is set at 6.74%, payable semi-annually from the date of issue.

The Toronto-based uranium producer is developing the Mkuju River uranium project in Tanzania, which it has the option to buy from its majority shareholder, JSC Atomredmetzoloto (ARMZ) for about $1 billion. Uranium One, which owns projects in Kazakhstan, Australia and the United States, is 51.4%-owned by ARMZ, a division of Russia’s state-owned nuclear giant Rosatom.