Tag Archives: business

Armenia’s Ucom to be handed to Orange

OCT. 7 2015 (The Conway Bulletin) — Armenia’s Ucom, best known for its fibre optic cable business, said it wanted to hand Orange Armenia to three banks to guarantee its liquidity during the increasingly tough economic climate. The Armenian mobile regulator said it will consider the decision later this week. The loss-making Orange Armenia was owned by French company Orange until Ucom bought it in August.

ENDS

(News report from Issue No. 251, published on Oct. 9 2015)

Georgia scraps planned business tax cuts

OCT. 5 2015, TBILISI (The Conway Bulletin) — Signalling that a regional economic crisis is worse than it had thought, the Georgian finance ministry said it would scrap a flagship policy that would have cut corporation tax and encouraged business growth.

The Georgian Dream government said earlier this year that it wanted to copy an Estonian tax policy that scrapped corporation tax on profit re-invested into businesses in order to generate more growth. The downside was that, in the short term at least, tax receipts would also drop.

And now, at a meeting to discuss the government’s proposed budget for 2016, deputy finance minister Giorgi Kakauridze said that plans to introduce the tax cuts this year had been pushed back indefinitely.

“This is quite a difficult process, fraught with quite a lot of risk,” media quoted Mr Kvirikashvili as saying. “Yes this [model] has its positive sides, but there are lots of negative aspects as well, so it has to be thoroughly considered. No final decision has been made in which direction this reform will go.”

The bottom line is that Georgia’s budget relies heavily on corporation tax. To cut this tax now, with the economy worsening, would be fool- hardy, the government appears to have decided.

Analysts, though, were scathing and said the tax reform should never have been discussed in the first place.

“It is not the first time Georgian Dream has promised changes they’re unable to keep. They should have known that the economic crisis would make this reform a bad idea.” said Giorgi Aptsiauri, economist at the Georgian Institute of Politics. “Income from corporation tax is a large part of the budget. They can not afford a cut in revenue with the current economic situation.”

ENDS

(News report from Issue No. 251, published on Oct. 9 2015)

Tourism grows in Georgia

OCT. 2 2015 (The Conway Bulletin) – Tourist numbers to Georgia are rising, the government said when it issued new data which showed that revenue from tourism rose to $430m in the second quarter of this year — a 6% increase from the same period in 2014. The government has been promoting Georgia heavily as a tourist destination.

ENDS

(News report from Issue No. 251, published on Oct. 9 2015)

Aerbaijan car imports drop

OCT. 6 2015 (The Conway Bulletin) – Car imports to Azerbaijan halved in the first eight months of the year, the Azerbaijani statistics committee said. It said in Jan-Aug, Azerbaijan imported 21,147 cars, down from 39,198 in the same period in 2014. Azerbaijan’s currency has devalued this year and new regulations mean imported cars have to take a higher grade of petrol than previously, making it harder to import older cars.

ENDS

(News report from Issue No. 251, published on Oct. 9 2015)

Kazakhstan based ERG borrows $352m

OCT. 7 2015 (The Conway Bulletin) – Kazakhstan-based Eurasian Resources Group said it has opened two credit lines with Russian lender VTB, highlighting its need for cash during this turbulent economic period. The two loans total $352m and will be used to upgrade two aluminium plants.

ENDS

(News report from Issue No. 251, published on Oct. 9 2015)

Kazakhstan’s airline leases 4 Airbus

OCT. 6 2015 (The Conway Bulletin) — AerCap, a Netherlands-based aircraft leasing company, will provide four Airbus to Air Astana, Kazakhstan’s flagship airline. Angus Kelly, AerCap’s CEO, said the new aircrafts will be mainly used for Air Astana’s long range flights between Asia and Europe. In June, Air Astana also agreed a deal with AerCap to lease seven Airbus aircrafts starting in 2016.

ENDS

(News report from Issue No. 251, published on Oct. 9 2015)

Azerbaijan orders ferries for the Caspian

OCT. 5 2015 (The Conway Bulletin) – An Azerbaijani shipping company is ordering three passenger ferries to run a new route across the Caspian Sea, evidence that the Caspian is becoming an important transport route for people and goods. Media quoted Azerbaijan Caspian Shipping Company as saying that each ferry would carry 80 people.

ENDS

(News report from Issue No. 251, published on Oct. 9 2015)

Azerbaijan’s oil output falls in BTC

OCT. 8 2015 (The Conway Bulletin) — Oil flows through the Baku-Tbilisi- Ceyhan pipeline fell by 1% in the first nine months of 2015 compared to the same period last year, an unnamed source at Azerbaijan’s state-owned energy company SOCAR told Reuters. Oil output in Azerbaijan has been falling over the past few years.

ENDS

(News report from Issue No. 251, published on Oct. 9 2015)

Tethys shareholders reject Kazakh companies’ final buy-out offer

ALMATY, OCT. 7 2015 (The Conway Bulletin) — London-listed Nostrum Oil & Gas withdrew its offer to buy Tethys Petroleum, ending hopes of a merger between the two Kazakhstan- focused companies.

Shortly after Nostrum announced it had scrapped its bid, Kazakhstan- based AGR Energy submitted an offer to buy a large chunk of equity in Tethys for a premium. The AGR offer, helped Tethys shares rebound by 12% on the Canadian stock market.

Earlier the final word on the long- running Nostrum bid came from Tethys’ largest shareholder, Pope Asset Manager. It said it did not support the latest offer of 0.147 Canadian dollars per share that would have valued the company at $49.5m.

Nostrum had tried to buy Tethys’ shares for two months but a deal slipped away as the sustained oil price collapse ate into the value of energy companies in general and Tethys shares in particular.

Both companies have their main operations in Kazakhstan. The value of their assets has decreased due to the weakening Kazakh tenge against the US dollar.

Nostrum’s withdrawal was an opportunity for AGR, a company linked to the Assaubayev family. It put in an offer of $20m for a large portion of Tethys’ equity, valuing shares at 0.165 Canadian dollars. In addition, AGR also proposed a $5m loan to support short-term liquidity and the option of buying more shares.

Earlier in August, Tethys failed to conclude a $47.7m refinancing deal with AGR, which would have granted the Kazakh company a controlling stake in Tethys.

The Assaubayev family was involved in Kazakhstan’s gold sector but has since switched its focus to oil. In August 2014, it invested $62.5m into British company Max Petroleum becoming a 51% shareholder.

ENDS

(News report from Issue No. 251, published on Oct. 9 2015)

Business comment: Analysts see oil output drop

OCT. 1 2015 (The Conway Bulletin) — In the past few months of tumbling oil prices, analysts have discussed Azerbaijan and Kazakhstan and debated whether they could keep oil production steady.

The PRIX index, a young and fully independent barometer of the 20 major oil exporting countries, forecasts a fall in oil exports in Q4 2015 for both Azerbaijan and Kazakhstan, a stark change after a positive forecast in Q3 2015.

PRIX’s methodology is simple, as it collects forecasts on oil exports from around 300 analysts around the world. It has rapidly gained credibility due to the volume of data it generates.

John Friedman, analytical advisor at PRIX, said: “We’re still in a bear market for oil.”

He noted that exporters do not yet want to give in and cut exports despite low oil prices.

Indra Overland, project director at PRIX, said the situation in Azerbaijan was particularly worrisome.

“Oil production in Azerbaijan is clearly falling. This is due to resource depletion, though one could also argue that it is indirectly due to the unattractive climate for exploration and investment,” Mr Overland said.

Importantly, the PRIX index also highlights the agreement, or lack thereof, between the surveyed analysts. It is interesting to note that disagreement among analysts covering Azerbaijan and Kazakhstan has risen significantly, as oil prices and export data keep falling.

ENDS

(News report from Issue No. 250, published on Oct. 2 2015)