Tag Archives: business

Azerbaijani President to bail out mining company

MAY 27 2016 (The Conway Bulletin) — Azerbaijan’s President Ilham Aliyev said that the state was ready to buy the Aimroc mining company, which is alleged to be linked to his family. The company closed in 2014, as it ran into financial difficulties exploiting the Chovdar mine in western Azerbaijan. Aimroc’s name appeared in numerous investigations that linked its opaque offshore business to the presidential family. By presidential decree state-owned Azerigold will take over Aimroc.

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(News report from Issue No. 283, published on June 3 2016)

Kyrgyzstan to pay high price for electricity

JUNE 1 2016 (The Conway Bulletin) — The Kyrgyz government is under pressure to justify paying relatively high prices to Kazakhstan for electricity. Dastan Dzhumabekov, an MP in the ruling government coalition, asked Alibek Kaliyev, head of the National Energy Holding, to clarify why Kyrgyzstan accepted paying 9 tenge ($0.026) per kWh to Kazakhstan, while Kazakhstan charges Russia only 5 tenge ($0.014) per kWh. Mr Kaliyev was unable to give a clear answer which MPs said was illogical given Kyrgyzstan’s membership of the Eurasian Economic Union.

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(News report from Issue No. 283, published on June 3 2016)

SOCAR’s finances falter

JUNE 3 2016 (The Conway Bulletin) — In 2016, Azerbaijan found itself in the midst of a crisis that it had tried to ignore for months. Low oil prices hit both revenues and investment opportunities for SOCAR, the state-owned energy company.

It is now trying to cut expenditures and raise cash through bonds and loans for its main projects. In Turkey, SOCAR’s subsidiary is divesting from a large petrochemical complex and readying for an IPO, in an effort to go full-steam into the Southern Gas Corridor business.

And Turkey is a key partner in the pipeline game, as it will become the gateway for Azerbaijani gas to Europe.

Now, though, SOCAR faces a problem. It can either diversify its portfolio, cut investments and wait for sunnier days or go ahead and pour cash — borrowed cash — into the US and Europe’s pet pipeline project.

Little does it matter that US President Barack Obama and British PM David Cameron both sent kind words to Azerbaijan’s international energy conference this week. SOCAR still has a problem.

But if it invests disproportionately into infrastructure, it might not have enough to ensure that production upstream is steady enough to fill the pipelines, which would be a repeat, though a much faster one, of the fate of the BTC oil pipeline, now constantly used below capacity.

The incessant movements, even marginal, in foreign markets in the past few months reveal how shaky SOCAR’s position is. Last week it closed representative offices in three countries to save money. But that won’t be enough to pay back the gamble it has taken with all the outstanding loans and bonds to build the West’s dream pipeline.

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(News report from Issue No. 283, published on June 3 2016)

GM Uzbekistan to produce new model car

MAY 30 2016 (The Conway Bulletin) — Car manufacturer GM Uzbekistan will produce a new model of Chevrolet Aveo cars for both the domestic market and exports to Russia, state-owned Uzavtoprom said. GM Uzbekistan, 75% owned by Uzavtoprom and 25% owned by US- based GM, said production of the new model will cost around $100m and its Uzbek plant will manufacture 73,600 cars/year. GM Uzbekistan is an important part of the Uzbek economy as it is one of its biggest JVs outside oil and gas.

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(News report from Issue No. 283, published on June 3 2016)

Iran plans jet fuel sales to Armenia and Tajikistan

MAY 28 2016 (The Conway Bulletin) — This year, Iran will increase exports of jet fuel to Armenia and Tajikistan, Iranian officials said. Last year, Iran exported jet fuel to Armenia. Although detailed numbers are not public, volumes amounted to a few thousand tonnes. In 2016, Iran added Tajikistan to the list of buyers, a sign of closer commercial relations with Dushanbe. Central Asia has been quick to try to pull Iran into its economic circle since sanctions were eased in February.

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(News report from Issue No. 283, published on June 3 2016)

RusHydro to invest in Armenia

JUNE 2 2016 (The Conway Bulletin) — The International Energy Corporation, a subsidiary of Russia’s state- owned electricity company RusHydro, said it would invest 18.9b dram (around $4m) into modernising the Yerevan-1 hydropower plant. Yerevan-1 is part of a seven-hydropower plant complex collectively called Sevan-Hrazdan Cascade. RusHydro owns a 90% stake in the company.

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(News report from Issue No. 283, published on June 3 2016)

Azerbaijan’s minister urges AZAL to pay depts

MAY 31 2016 (The Conway Bulletin) — Azerbaijan’s ministry of finance urged AZAL, the national airline, to start paying back its debts and cut costs. Finance minister Samir Sharifov said that in order to buy new aircrafts AZAL has accumulated over 650m manat ($450m) in state-guaranteed loans, which could become a burden to the state budget if AZAL becomes insolvent. Several state-owned and private companies in Azerbaijan have increased their borrowings as an economic downturn hits profits.

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(News report from Issue No. 283, published on June 3 2016)

Kazakhstan’s stock lists Magnum’s bond

MAY 27 2016 (The Conway Bulletin) — KASE, Kazakhstan’s stock exchange, said it listed 10-year bonds issued by Magnum Cash & Carry, a chain of discount stores in Kazakhstan. The total issue amounted to 33b tenge (around $100m), one-third of the amount that Magnum plans to issue in the short term to finance its expansion in the country. In May 2014, Kenes Rakishev, son-in-law of Kazakhstan’s defence minister and closely-linked to the elite, bought a minority share in the company.

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(News report from Issue No. 283, published on June 3 2016)

KazKom buys back bonds

JUNE 2 2016 (The Conway Bulletin) — Kazkommertsbank, Kazakhstan’s largest lender, said it had bought back part of its outstanding bonds, spending around $35m in total. In May, CEO Kenes Rakishev had said the bank was ready to repurchase as much as $500m in outstanding bonds. After the latest transaction, KazKom has to pay back around $522m from two bond issues due later this year and €392m ($437m) due in February 2017.

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(News report from Issue No. 283, published on June 3 2016)

Georgia’s city develops

MAY 20 2016 (The Conway Bulletin) — House in Alley, a local development company, said it will build a new hotel in Batumi, a resort town on Georgia’s Black Sea coast. The company said the new hotel, which will cost 18m lari ($8.4m), will hold 105 rooms. The new hotel is part of the government-supported project to improve the area around the Heroes Alley in central Batumi. Batumi is Georgia’s top resort town.

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(News report from Issue No. 282, published on May 27 2016)