What the Russian papers say


MOSCOW, July 7 (RIA Novosti) $12 billion and counting / Orange coalition breakup looms in Ukrainian Rada / Alexander Veshnyakov decides to hedge elections against State Duma / Political explosion in Transdnestr

(RIA Novosti does not accept responsibility for the articles in the press)


$12 billion and counting

Wealthy foreigners and investment funds, ordinary Russians and oil companies are ready to invest $12 billion in the shares of Rosneft, Russia's state-owned oil giant. According to respected business daily Vedomosti, IPO organizers had raised this sum by Thursday evening and IPO organizers and independent experts said it may increase.
Three IPO organizers told the paper that demand for Rosneft shares had exceeded minimal IPO requirements on Thursday. Two of them said over $12 billion had been raised by 6.00 p.m. Moscow time (2 p.m. GMT). A banker said average share application prices were being charged.
Rosneft sellers were lucky on Wednesday and Thursday. As one IPO organizer said demand had increased by a third on Wednesday. Two bankers told the paper on Wednesday morning that only 70% of the sum had been raised at the lower price margin.
China National Petroleum Corporation and China's Petroleum & Chemical Corporation (Sinopec), the Oil and Natural Gas Corporation of India and British energy giant BP had all subscribed by Wednesday morning.
One IPO organizer said Russian and foreign institutional investors, as well as wealthy people, had fueled demand by subscribing in large numbers in the last two days. Another organizer told the paper that neither Russia's richest man Roman Abramovich, nor Suleiman Kerimov, who owns large stakes in energy giant Gazprom and Sberbank Savings Bank, had subscribed so far.
Maxim Shein, chief analyst at the Broker Credit Service brokerage, said market players had believed the Russian government could ask Abramovich and Kerimov to buy shares as an insurance policy. Millhouse Group, the Chelsea soccer club owner's investment vehicle, declined to comment and a top manager of Kerimov's oil and gas company Nafta-Moskva denied any interest in Rosneft.
Bankers have noted high demand for Rosneft shares among private individuals, but these subscriptions are so far yielding modest results.
One banker said private individuals had invested several hundred million dollars into Rosneft by Thursday evening and another said over $200 million had been raised in private subscription.
Not all subscribers can buy shares. A Sberbank office in Severodvinsk, a northern Russian city, did not accept an application for Rosneft shares from a relative of a Vedomosti employee because the list of applicants had already been filled by July 10. An office of financial corporation Uralsib in Arkhangelsk reported a similar situation. On Thursday, Rosneft had to extend the deadline for accepting applications from private individuals until July 12 and the subscription will be closed on July 13.
Gazprombank said it would accept Rosneft share applications this weekend, July 8-9.
Shein said preliminary IPO results had exceeded all expectations and the placement fee would total $6.8-7 per share, or $70-72 billion on the whole. Denis Borisov, an analyst with Solid brokerage, said a share would cost $6.8-7.15 and Rosneft's value would reach $70-73 billion. Borisov said Rosneft had collected most share applications and demand was unlikely to increase dramatically.
But IPO organizers listed virtually all foreign oil majors among prospective buyers. On Thursday, The Financial Times added Temasek Holdings of Singapore to the list.
Dow Jones quoted Paolo Scaroni, chief executive officer of Italian energy giant ENI, as saying that the company, which was previously listed as a prospective buyer of Rosneft shares, was not interested in buying a stake in the Russian company.
Two banks, organizers of the IPO, have stated their intention to buy shares. Uralsib president Nikolai Tsvetkov and Sberbank chairman Andrei Kazmin both said on Tuesday that their banks wanted to acquire the company's shares.
Rosneft declined to comment.

Nezavisimaya Gazeta

Orange coalition breakup looms in Ukrainian Rada

Ukraine may be in for a new political crisis as reshuffles continue in the newly formed parliamentary coalition. Many in the Yulia Tymoshenko Bloc (BYT) feel unhappy over yesterday's "orange" compromise with the Party of Regions over the leadership of half of key committees.
Though ending a parliament-blocking opposition hunger strike, the compromise led to threats from BYT to abandon the coalition and leave the other "orange" movements facing a "blue" invasion for the pro-Russia party.
Alexander Turchinov, a close Tymoshenko ally, said the majority could well have voted for the Rada speaker and prime minister, disregarding the opposition. This caused a rebuke from Our Ukraine, the party loyal to President Viktor Yushchenko. Senior OU member Roman Zvarich said BYT's antagonism to Yanukovich could undermine the coalition.
"Under the original deal, BYT got most of the key positions because they got more votes than other 'orange' factions. However, the Party of Regions was the first overall so Tymoshenko's people will have to give up some of their positions if [the opposition] comes into the equation," an OU member told the paper. It is possible that BYT will break up the majority after such a reshuffle, he said.
"With only 243 seats, this will cease to be a majority as such. A new coalition with the Party of Regions will have to be forged."
All factions declined to comment on possible "orange" collapse yesterday.
"Let's vote for the speaker by secret ballot and - contrary to what we had promised to the opposition - in a separate vote from the prime minister. Such a vote will show who's where," a Socialist Party member told NG.
If the "orange" coalition fails to install Petro Poroshenko as speaker in a secret ballot, an OU lawmaker said, this will mean the coalition is over.
"By betraying one another from the first vote, we admit we will not be able to come to any important solution in the future. This will also mean we will have to give up this coalition for something more capable," he said.


Alexander Veshnyakov decides to hedge elections against State Duma

Alexander Veshnyakov, head of the Central Election Commission (CEC), urged the State Duma on Thursday not to consider amendments to election legislation tightening up requirements to candidates. The first reading is scheduled for July 8.
"This is not what the country and the electoral system need, and it is dangerous," he said, referring to the amendments submitted in June by a large group of deputies from several factions. The CEC head described them as "discrediting legislation." They concern the reinstatement of early balloting and introduction of additional grounds for refusing registration of candidates and party lists - such as extremist activity, and failure to provide true information or submit properly filled-out documents.
Veshnyakov cited the typical example of a candidate giving imprecise property statistics. "He may indicate his apartment's floor space as equaling 38.8 square meters, while the technical specifications bureau may have 39.8 on its books. Under the new amendment the commission will have every reason to deny his registration," he said.
He said he feared a return to early balloting might lead to abuses. He said large numbers of such voters descending on polling stations and a suspiciously high percentage of such balloting were recorded in a number of regions. During the 1999 presidential election in the Karachayevo-Circassian Republic, 30% of the voters polled ahead of time. He also had an issue with a proposal to disqualify candidates for extremist activity. He thinks the notion "extremism" is given too broad an interpretation. "Nearly every criticism against top functionaries can be interpreted as extremist activity," Veshnyakov said.
He suggested that the examination of the amendments be postponed and parliament hold hearings to edit the document. "I have deep respect for the Duma. When it invites me, it agrees with me in most cases. I hope it will do so this time, too," he said.
At the plenary meeting of the State Duma last Wednesday, Rodina faction member Boris Vinogradov suggested inviting Veshnyakov and listening to his arguments, but the parliamentary majority refused to back his initiative.

Vremya Novostei

Political explosion in Transdnestr

The first terrorist attack since the 1992 civil war shook the capital of breakaway republic of Transdnestr in Moldova Thursday. Eight people died and more than 20 were wounded in an explosion in a minibus in Tiraspol.
Dmitry Osadchuk, the PR head of the unrecognized republic's state security ministry, said five of the dead had been identified. One of them was a nurse from Russia's peacekeeping force in the region.
Osadchuk said: "The initial version that the minibus was gas-powered has not been confirmed." Judging by the damage, it was "an electromagnetic bomb," and possibly a terrorist attack, said Colonel Nikolai Baranov of the Russian Defense Ministry.
According to Osadchuk, the bomb was planted to destabilize the situation in the republic ahead of a September referendum and the December presidential elections. It could be also the revenge of the Moldovan security services for the arrest of five Moldovan policemen, who were allegedly shadowing one of the Gagauz leaders, Ivan Burguji, and planned to capture him, in Tiraspol on June 14. However, the policemen were soon released due to Russia's intervention.
Another version suggests a conspiracy timed for the G8 summit in St. Petersburg, which is to discuss the issue of self-proclaimed republics. According to it, the conspirators' objective was to expose the inability of Russian peacekeepers to ensure peace in the republic, said Alexei Martynov, head of the Russian-Transdnestr information and analysis center.
It could also be an ordinary settlement of accounts between rival forces in Transdnestr. Tiraspol sources of the daily mentioned the Sherif company, the owner of the republic's biggest supermarket chain whose operation depends on the self-proclaimed status of Transdnestr.
The sources say a potential change in the status quo at the September referendum, initiated by Transdnestr leader Igor Smirnov, will not suit Sherif and the deputies of the new republic's parliament it controls. However, the legislators have not yet approved the idea of the referendum.
The daily's sources say the goal of the minibus blast was the December presidential elections, where the said group intends to ensure the election of its candidate as vice president, who would subsequently replace Smirnov.
Oleg Gudymo, head of the security commission of the Transdnestr Supreme Council, warned Vremya Novostei against "jumping to rash conclusions."
Vladimir Antyufeyev, head of the Transdnestr Ministry of State Security, shares this view. He said it would be premature to speak about a political hue to the tragedy. The republic's authorities have asked Ukraine and Russia for assistance. Explosives experts from Odessa, Ukraine, have arrived in Tiraspol, where specialists from the Russian Federal Security Service are also expected.
Antyufeyev said Transdnestr "politely declined" the assistance of Moldovan security services. "We have only agreed that they would inform us of everything they learn about the tragedy," he said.

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