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capitalisation of RUB8bn as of June 1 in Moscow. Previously on the day the sanctions were announced, Deripaska's Ingosstrakh insurer already sold 17.52% in the group.
Sanctioned Russian carmaker GAZ has postponed a share issue and the company’s main shareholder Oleg Deripaska has refused a state loan. Russian carmaker GAZ group approved the dividend payment of RUB4.39 per preferred share at the annual shareholder meeting on June 27. Due to the sanctions the shareholders decided to call off the planned RUB63bn ($1bn) share issue, which was previously considered as alternative to raising money from banks. Recent reports indicated that facing sanctions GAZ could get state support in form of financing from bailed, nationalised, and restructured Promsvyazbank (PSB). However, Deripaska has turned down the offer from PSB due to onerous conditions that included all the risks associated with sanctioned oligarchs in the interest rate, which was way above the market, Vedomosti daily reported on June 29 citing unnamed sources.
Korean car major Hyundai could invest $400mn in new production facilities in Russia under a special state-facilitated investment contract, Interfax and Vedomosti d aily said on June 24 citing the Ministry of Industry and Trade. The nature and precise amount of the investment are still unclear, but previously Hyundai planned to build an engine plant in Russia with annual capacity of 0.15mn units for its Hyundai and Kia models assembled in St Petersburg. The total investment of Hyundai in St Petersburg already exceeds $1bn. Volkswagen (VW) spent €250mn on its engine plant in Kaluga with the same capacity and Ford Sollers invested $275mn for a plant in Tatarstan that has 0.105mn annual engine production capacity. Analysts surveyed by Vedomosti s ee Hyundai's investment as justified given its 23.5% market share on the growing Russian car market , as compared to 3.1% for Ford and 11.2% for VW.
9.2.3 Aviation corporate news
Russian aviation group S7 Group controlled by Natalia and Vladislav Filevs intends to invest $300mn in acquiring and renovating 36 Soviet space rocket engines NK-33 and NK-43 from the state, the general manager of S7 Space Sergei Sopov told Vedomosti d aily on June 19. The company is looking to reverse engineer the engines at a newly constructed plant in Southern city of Samara, to obtain engines capable of multiple space launches, analogous to those used by SpaceX of Elon Musk. S7 Group is Russia's second-largest air carrier after Aeroflot and the largest private carrier. Now it’s eyeing the commercial space launch market. Most recently S7 acquired floating spaceport "Sea Launch" from state space agency RosKosmos and plans to perform the first launch from platform in December 2019 using Ukrainian Zenith rockets. So far the company has invested $160mn in the project.
9.2.4 Construction & Real estate corporate news
O1 Properties of Russian billionaire Boris Mints informed the holders of its $350mn Eurobonds that it will change ownership , Vedomosti d aily said on June 25 citing unnamed sources among the bondholders and O1 minority shareholders. Last week O1 Group Finans, the owner of the
RUSSIA Country Report July 2018 www.intellinews.com