What the Russian papers say

MOSCOW, November 24 (RIA Novosti)

Belarus's recognition of Abkhazia, South Ossetia pegged to Lukashenko's bargaining with Moscow / Daimler seeks stake in Kamaz / Moscow, Astana continue to wrangle over Baikonur space launches / Government extends privatization list for 2010

Kommersant

Belarus's recognition of Abkhazia, South Ossetia pegged to Lukashenko's bargaining with Moscow

Three groups of Belarusian lawmakers visited Georgia, Abkhazia and South Ossetia last week. They will now submit their reports to parliament, which will make a decision on the expediency of recognition of the two self-proclaimed republics.

Despite their positive impressions of their trip, analysts still believe Belarus's decision will depend on the outcome of President Alexander Lukashenko's bargaining with Moscow.

The main conclusion drawn by the group visiting Abkhazia was that it has developed into an independent state. "It is a functioning state with all the standard attributes of sovereign statehood," said Mikhail Rusy, a lower house member.

The lawmakers who visited South Ossetia also sound optimistic. Vladimir Kuzhanov, deputy head of the parliamentary Commission for International Affairs and CIS Relations, said the Belarusian delegation was given every opportunity to see what they deemed necessary. "We could see and hear anything we wanted," he said.

Now the Belarusian parliament will study their reports and decide whether to recognize Abkhazia and South Ossetia as independent states or not. The timeframe for the decision is also unclear, as Belarus has been sending contradictory signals over the past few months.

In early November, Sergei Maskevich, head of the Commission for International Affairs and CIS Relations, said the country's parliament was not planning to consider the issue before the end of the year, although a special group was to be set up to research it.

Observers in Minsk do not believe the lawmakers' trip to the Caucasus will help much. Yaroslav Romanchuk, head of the Mizes Research Center in Minsk, said President Lukashenko would have the final say anyway, depending on the result of his bargaining with Moscow.

"Lukashenko needs two things Moscow can give him - money (in fact much more than Moscow is prepared to give) and guarantees that Moscow will at the very least remain neutral on the upcoming presidential elections. The comedy will be over once he gets what he needs," the Belarusian analyst concluded.

Vedomosti

Daimler seeks stake in Kamaz

The state corporation Russian Technologies has encountered a rival for shares in the Kamaz truck maker. Germany's Daimler wants to buy 15% of the company. It needs only to negotiate the price with Troika Dialog.

The corporation, which is to receive a 37.8% stake in Kamaz, proposed to Troika in September that it sell the corporation 13% of the automobile plant (the investment company holds 44% of its stock) to increase its holding to a controlling level. But Daimler, which owns a 10% package in the truck manufacturer' shares, enjoys the priority right to buy from the investment company.

Daimler is seeking to purchase a slightly larger chunk of Kamaz than does Russian Technologies, or 15%, a source close to Kamaz owners said. This will make it possible to increase the current 10% stake to a blocking one. The parties are currently negotiating the price of the deal, sources told Vedomosti. But they are not saying how much the German firm offered to pay for the shares. Uta Leitner, a Daimler spokesperson, only confirmed that the company was discussing with Troika and Kamaz further cooperation, including an increased stake.

Market capitalization of Kamaz on the RTS on Monday was $1.73 billion, with the stake of interest to Daimler worth $259.5 million. About the same amount was paid by the German company to Troika for 10% of Kamaz shares at the end of 2008.

In the longer term, the purchase of an additional package of Kamaz shares would be worthwhile, says Vladimir Bespalov, an analyst with VTB Capital. After all, Kamaz has more than half of all truck market in Russia and will not back down even when the country emerges from the crisis.

Daimler's increased stake is unlikely to be a blow to the state corporation, believes the top manager of this large auto holding company. Russian Technologies will be hard put to secure budget money to buy Kamaz. Besides, initially a deal with Daimler presupposed the sale of 42% of Kamaz to it, but the crisis intervened. Currently, Daimler is in a financial spot, but its 3rd quarter results showed profits: its EBIT was 470 million euros ($700 million), and net earnings, 56 million euros ($84 million).

True, the deal is not 100% guaranteed. Kamaz general director Sergei Kogogin said on Saturday that in pre-crisis days Daimler would "no doubt" have boosted its stake, "but now with money scarce everything becomes different."

Kommersant

Moscow, Astana continue to wrangle over Baikonur space launches

On Monday, the government of Kazakhstan canceled the planned November 23 launch of Russia's Proton-M rocket with the Eutelsat W-7 satellite from the Baikonur space center.

Moscow and Astana have been wrangling over space launches for a long time.

The W-7 satellite owned by Eutelsat S.A., a French-based satellite provider, was to have been orbited in October 2009 as part of the Sea Launch project involving the United States, Russia, Ukraine and Norway, and using a mobile sea platform for equatorial launches of commercial payloads.

Due to the project's bankruptcy, the payload was relocated to Baikonur.

On Monday, Russia's Federal Space Agency (Roscosmos) issued a statement that the W-7 launch was being jeopardized for reasons beyond Russia's control.

Kazakhstan's National Space Agency Kazcosmos blamed Roscosmos for repeatedly changing plans for the spacecraft launch.

Roscosmos spokesperson Alexander Vorobyov said this was not happening for the first time, and that in the past the Kazakh side had authorized launches only one day in advance.

Kazcosmos spokesperson Aset Nurkenov claims the W-7 launch was not listed in the approved timeframe, and that each ahead of schedule launch must be approved by a separate resolution of the Kazakh government.

The relevant document was sent to Kazakh Prime Minister Karim Massimov, currently on an official visit to Hong Kong, for signing. Massimov has so far not signed the resolution.

Vorobyov said Russia had paid $1,265,000,000 for using the Baikonur space center under a lease contract with Kazakhstan since 1999, not to mention investment in the Baikonur infrastructure and space center development.

The delayed Proton launch will not trigger a political conflict because Kazakhstan realizes that it cannot run Baikonur, said Dosym Satpayev, head of the republican Risk Assessment Group.

Although Russia still lacks an alternative to Baikonur, both countries regularly make demands of each other. Astana wants to use the space industry in its interests. But its proposals often boil down to personnel training programs and technology transfers, rather than providing funding. However, Moscow is reluctant to expand such cooperation.

RBC Daily, Izvestia

Government extends privatization list for 2010

The Russian government has added 14 companies from the list of strategic enterprises to the 2010 privatization list. Potential bidders are analyzing the assets, but their decision will depend on the price.

The privatization list for next year includes 449 joint-stock companies and 250 state unitary enterprises.

"The state owns too many assets that it cannot manage effectively. Therefore, the list of state-owned companies should be reduced and streamlined," a source in the government said.

There are bidders in Russia and abroad for the majority of assets slated for privatization. "All of these assets are attractive for investors," the source said.

The most attractive of the new assets is the Novorossiisk Commercial Seaport, the largest in Russia. In November 2007, the company floated 19.38% of its shares on the London Stock Exchange and in Russia, raising as much as $1 billion. Transcreditbank bought 5% for rail monopoly Russian Railways, and the Russian government owns a 20% stake in the port. Given the current LSE quotations, the company is worth $2.96 billion.

The government planned to withdraw from the capital of some companies but could not agree on the method. One of such companies is SG-Trans, a 100% state company selling and transporting LNG by rail in Russia and for export.

The government may sell nearly 700 stakes within a year if the price is right, analysts say.

Anton Struchenevsky, chief economist at the Troika Dialog investment company, said price could become the stumbling block of privatization next year.

"However, since privatization is a good way to replenish the budget, we can expect next year's privatization to be carried out in accordance with market principles," he said.

Valery Mironov, deputy director of the Development Center at the Moscow Higher School of Economics, said mass privatization could be hindered by the situation on the market. "If a second wave of the crisis hits Russia, investors will buy only very cheap assets," he said.

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