BERLIN (AFP) – German Chancellor Angela Merkel said Tuesday she was expecting a “comprehensive thank-you letter” from General Motors for huge loans to keep the auto maker’s Opel unit afloat, which she said had now been repaid. “I can tell you that the last funds (received by) General Motors have been paid back, which means that the Opel operation has not cost the German taxpayer a cent,” Merkel said in a speech in Berlin. She added with a smile that she expected “a comprehensive thank-you letter from General Motors in a few years,” a comment that prompted cheers from the crowd of business leaders she was addressing. And she defended her decision to offer the 1.5-billion-euro (2.2-billion-dollar) loan to the Detroit-based car giant, saying: “It was absolutely right … to build a bridge.” Earlier this month, Merkel said that Opel would have been finished without Berlin’s loans. “Without our involvement there would be no Opel today,” Merkel told the Frankfurter Allgemeine (FAZ) daily. “We secured Opel’s chances of survival.” The loan had been due to be repaid by November 30. GM agreed in September to sell a majority stake in Opel, which includes Vauxhall in Britain, to Canadian auto parts maker Magna International and Russian state-owned lender Sberbank. But it later pulled a handbrake turn on the deal, deciding instead to keep the loss-making unit and restructure it itself, with the potential loss of thousands of jobs across Europe. It has not yet said where the jobs will be cut and which plants will be closed, leaving GM’s 50,000 employees across Europe fearing for their jobs. The u-turn infuriated Germany and Merkel, who had invested a lot of capital, both political and financial, in the deal with Magna-Sberbank. Germany had offered a total of 4.5 billion euros’ worth of state aid for the deal, including the 1.5-billion-euro loan and three billion euros in state loan guarantees. The news was all the more embarrassing for Merkel as it broke during her recent official visit to the United States. However, in a boost for Merkel and German Opel employees, GM Europe’s interim head Nick Reilly said earlier Tuesday the firm expected to keep open its plants in Bochum and Kaiserslautern in western Germany. The Bochum plant, employing almost 5,200 people near Essen will remain “an important location in the future,” Reilly said after talks with the premier of the German state of North Rhine-Westphalia where the site is located. Astra and Zafira cars are assembled at Bochum, which also makes axles and gearboxes, according to Opel’s website. It is one of four Opel plants in Germany, employing between them around 25,000 people. Reilly later added that Kaiserslautern, where a further 3,300 people are employed, “will play an important part in the future of Opel.” The GM boss also said that GM would on Wednesday present its concrete plans for the unit, which are expected to result in a 20 to 25 percent cut in production capacity and the loss of between 9,000 and 9,500 jobs. GM is seeking roughly 3.3 billion euros in financing from European governments. A GM spokesman said the plan would be discussed with union representatives and relevant governments before it was made public. German magazine Spiegel said the company had received offers of 400 million euros from Britain and between 300 and 400 million euros from Spain, as well as proposed tax breaks from Poland. Following a meeting of top finance ministry officials and GM executives in Brussels on Monday, the European Commission said that nations affected had decided not to make formal commitments before a further meeting on December 4. The rest is here: Merkel waiting for ‘thank-you letter’ from GM

Read the full story

ALBANY, N.Y. (AP) — New York’s top court ruled Tuesday that the state can use eminent domain to force homeowners and businesses to sell their properties for a massive development in Brooklyn that includes a new arena for the New Jersey Nets. In a 6-1 ruling Tuesday, the Court of Appeals said the Empire State Development Corp.’s finding that the area was blighted was enough to justify taking the land. A group of tenants and owners claim the seizure is unconstitutional. They argue that developer Bruce Ratner’s proposed $4.9 billion, 22-acre Atlantic Yards project mainly enriches private interests, while the state constitution requires public use for taking land. “The constitution accords government broad power to take and clear substandard and insanitary areas for redevelopment,” Chief Judge Jonathan Lippman wrote for the majority. “In so doing, it commensurately deprives the judiciary of grounds to interfere with the exercise.” Ratner’s proposed development includes office towers, apartments and a new arena for the NBA’s Nets. A key element in his plan is selling majority team ownership to Russian entrepreneur Mikhail Prokhorov. In a prepared statement, Ratner said construction will continue, with the intent that the Nets will play ball there in the 2011-2012 season. “Once again the courts have made it clear that this project represents a significant public benefit for the people of Brooklyn and the entire city,” Ratner said. “Our commitment to the entire project is as strong today as when we started six years ago.” The attorney for homeowners and tenants who declined to sell after the project was announced in 2003 said the fight isn’t over. Matthew Brinckerhoff said his clients will oppose the ESDC when the urban development agency goes to court in Brooklyn in the second step of the process to take the properties. “They have won round one, and we still have round two to go,” Brinckerhoff said. “I think everybody believes that they need to do a number of things by the end of the year, and where exactly this fits into that process I’m not sure. But the fact that they haven’t yet taken the properties can’t be helping them.” Calls to the ESDC were not immediately returned Tuesday. Lippman noted that the law empowering the government in the 1930s to partner with private entities to deal with the emerging problem of slums was intended also to create replacement low-cost housing. This plan instead is aimed at “alleviating relatively mild conditions of urban blight,” mainly a railyard, and there were only 146 people living within the project boundaries when the final environmental study was done, he wrote. In a dissent, Judge Robert Smith said the court majority was “much too deferential to the self-serving determination by the ESDC that petitioners live in a ‘blighted’ area, and are accordingly subject to having their homes seized and turned over to a private developer.” The record does not support the state agency’s finding, Smith said. While the blight is documented at northern end of the project site, the southern part “appears … to be a normal and pleasant residential community,” he said. Read the original: Court: NY can seize property for new NJ Nets arena (AP)

Read the full story

By Tom Kaeckenhoff and Erik Kirschbaum DUESSELDORF/BERLIN (Reuters) – General Motors has paid back a loan from Germany and slightly lowered its target for job cuts at struggling European unit Opel. Nick Reilly, the boss brought in from GM’s thriving Asian operations to help revamp Opel, told reporters in Duesseldorf on Tuesday that his plans now call for cutting 9,000 to 9,500 jobs at Opel and British sister brand Vauxhall. GM will present that plan to Opel’s labor leaders on Wednesday, having decided not to sell Opel to auto parts maker Magna International and Russian lender Sberbank , who said they would cut 10,000 jobs. German Chancellor Angela Merkel, whose government had supported GM’s plan to sell Opel to Magna, said on Tuesday that GM had also paid back the last of a 1.5 billion euro bridge loan it had made available to Opel. “I can tell you that the last funds for Opel have been paid back by General Motors,” Merkel said. “I expect at least a thank you letter from General Motors in a few years.” “German taxpayers have not lost a single cent on the entire Opel operation,” she said. The U.S. automaker, which has been bailed out by the U.S. government, is revamping operations worldwide but reassured German workers over its immediate plans. “Bochum remains an important site for us, in the future as well,” Reilly said, referring to Opel’s plant in western Germany. He said last week that it was too soon to say whether any plants would be closed. “We’ll try not to do it but we still don’t know how we’re going to carry out the production cuts,” Reilly said during a visit to Spain, where Opel’s largest factory is located. GM has provided scant details on its 3.3 billion euros ($4.92 billion) rescue plan for Opel and European officials are set to discuss possible aid on December 4. The automaker, which emerged from bankruptcy in July, muddied the waters in the debate over whether it should get state aid when its third-quarter results revealed it had nearly $43 billion in cash at the end of September. Germany — home to over half of Opel’s 50,000 staff — has given mixed signals on aid since GM’s U-turn on the Magna deal. EU Industry Commissioner Guenter Verheugen said on Monday that without state aid the revamp could not work. GM’s Reilly had traveled to Brussels to meet officials including Verheugen, Kris Peeters, the premier of Flanders, where Opel also has a plant, and EU Competition Commissioner Neelie Kroes. “General Motors made one point very clear, 100 percent clear, the restructuring plan could only be achieved when European member states with Opel plants give some financial help,” said Verheugen. (Reporting by Tom Kaeckenhoff and Erik Kirschbaum, writing by Michael Shields and Helen Massy-Beresford; Editing by Jason Neely) The rest is here: GM pays back Germany, signals fewer job cuts

Read the full story

BERLIN (AFP) – General Motors has repaid the 1.5 billion euros (2.2 billion dollars) in bridging loans it received from Germany to keep its troubled European unit Opel afloat, Chancellor Angela Merkel said on Tuesday. “I can tell you that the last funds (received by) General Motors have been paid back, which means that the Opel operation has not cost the German taxpayer a cent,” Merkel said in a speech in Berlin. She added that she expected “a comprehensive thank-you letter from General Motors in a few years.” And she defended her decision to offer the huge loan to the US firm, saying: “It was absolutely right … to build a bridge.” GM agreed in September to sell a majority stake in Opel, which includes Vauxhall in Britain, to Canadian auto parts maker Magna and Russian state-owned lender Sberbank. But it has since decided that it wants to keep the loss-making unit and restructure itself, with the loss of around 10,000 jobs across Europe. It has not yet said where the jobs will be cut and which plants will be closed. The news infuriated Germany and Merkel, who had invested a lot of political capital in the deal with Magna-Sberbank. Earlier Tuesday, GM Europe head Nick Reilly said the firm expected to keep open its plant in Bochum in western Germany. The plant, employing almost 5,200 people near Essen will remain “an important location in the future,” Reilly said after talks with the premier of the German state of North Rhine-Westphalia where the site is located. Astra and Zafira cars are assembled at the plant, which also makes axles and gearboxes, according to Opel’s website. It is one of four Opel plants in Germany, employing between them around 25,000 people, half the European total. Read the r est here: GM has paid back Opel loans to Germany: Merkel

Read the full story

BERLIN (AFP) – General Motors will keep open Opel’s Bochum plant in western Germany, the head of the US firm’s European division, Nick Reilly, said on Tuesday. The plant, employing almost 5,200 people near Essen will remain “an important location in the future,” Reilly said after talks with the premier of the German state of North Rhine-Westphalia where the site is located. Astra and Zafira cars are assembled at the plant, which also makes axles and gearboxes, according to Opel’s website. It is one of four Opel plants in Germany, employing between them around 25,000 people, half the European total. GM agreed in September to sell a majority stake in Opel, which includes Vauxhall in Britain, to Canadian auto parts maker Magna and Russian state-owned lender Sberbank. But it has since decided that it wants to keep the loss-making unit and restructure itself, with the loss of around 10,000 jobs across Europe. It has not yet said where the jobs will be cut and which plants will be closed. Go here to see the original: GM to keep Opel plant in German Bochum

Read the full story

By Aoife White, The Associated Press BRUSSELS, Belgium – General Motors Co. on Monday asked European governments to help pay most of the US$4.9 billion it needs to restructure its struggling European operations. At talks in Brussels Monday, EU nations where GM has plants vowed to avoid individual negotiations with the company before a Dec. 4 meeting, where they will co-ordinate their response to GM’s restructuring plans, due later this week. Nick Reilly, the CEO of GM’s Adam Opel GmbH and Vauxhall units, said it would be “quite difficult” for GM to supply much of the funding because it must also bear restructuring costs in the United States and elsewhere. “We are looking for support of any government that feels willing to be able to provide us some financing support in the medium term,” he told reporters after meeting officials from EU nations where GM makes cars. “We have indicated that we will provide some of the funding.” Reilly said GM would not be influenced in deciding where to cut jobs by how much money each government might offer because “the plan that we have is already in existence.” He refused to give details of the plan to cut some 20 to 25 per cent of the company’s car-making capacity – that will likely shed thousands of jobs. He said he first wanted to talk to workers’ representatives. “People at the plants will be the first to hear it,” he said. GM met Monday with ministers from Germany, Belgium, Britain, Spain, Sweden and Poland as well as European Union commissioners in Brussels to discuss cutbacks and aid. European nations fear that countries offering bigger subsidies could escape plant closures. Germany’s deputy economy minister Jochen Homann said there was a commitment from all countries not to make any promises before GM puts forward the restructuring plan. The head of Belgium’s Flanders region Kris Peeters said he expects the company to send that plan to governments at the end of this week and that “there will be until the meeting next week, no further individual meetings with GM.” Ahead of the Monday talks, Germany and Belgium rushed to the moral high ground by claiming that they did not want to join a subsidy race or see any state payments to the company linked to guarantees that it would keep jobs. This comes after Germany earlier this year raised hackles when it offered a large bridge loan and loan guarantees if GM Europe sold the majority of its struggling European business to Canadian car parts maker Magna International Inc. (TSX: MG-A.TO ) and Russian lender Sberbank. Belgium and others were angered by reports that Magna won German backing – and possible funding – because they had promised to save jobs in Germany and cut posts elsewhere, even at more efficient plants in Poland or Belgium. GM’s decision to ditch the Magna sale and hang on to the units has reawakened those fears – and caused officials to call in EU regulators as referees at the Monday meeting to discuss GM’s restructuring. EU commissioners said in a statement that the countries had agreed that any financial support to GM would not be linked to where it made investments on job cuts. They also said state aid had to facilitate car makers’ efforts to adapt production to falling demand. Britain and Poland have indicated that they are ready to support Opel operations in their countries – but have not said how much they might give. Spain says any support it gives would have to be agreed by the company and its workers. Germany appears reluctant to offer GM the euro4.5-billion loan it had promised Magna – and has yet to pledge the company any more money. German Foreign Minister Guido Westerwelle said Monday that GM should focus on protecting jobs and must repay any German loans “to the euro and cent” because the money “belongs to taxpayers and not GM.” Read the original post: General Motors calls on EU states to pay most of $4.9B restructuring costs

Read the full story

BRUSSELS (AFP) – The European Commission on Monday gathered ministerial heads from countries with General Motors plants in the face of fears of a subsidy auction over promised job cuts at the company’s European unit Opel/Vauxhall. European Union industry commissioner Guenter Verheugen also called in representatives from the US auto maker’s European arm, which aims to shed 10,000 jobs. Germany is home to about 25,000 workers, roughly half of GM Europe’s total, and Berlin, anxious to keep German plants running, had offered several billion euros in aid for a previously accepted takeover of Opel. GM abandoned that deal last month but is again working on a 3.3-billion-euro (almost five-billion-dollar) restructuring plan. German magazine Spiegel said the company had received offers of 400 million euros from Britain and between 300 and 400 million euros from Spain, as well as proposed tax breaks from Poland. There are also GM Europe plants in Austria and Hungary. The newly-named head of GM Europe, Nick Reilly, was to attend the commission meeting, and Kris Peeters, the head of the regional Flanders government, said he wanted “more explanations” from the company. Belgium’s offer of up to 500 million euros to keep a northern Antwerp factory open is “still on the table,” Peeters added. Jochen Homann, German secretary of state for economics, said he was “waiting to see what GM will present,” but added: “We won’t take part in a competition.” He said all governments could “rely” on the commission to ensure there would be no jobs auction at a time of high unemployment, expected to keep growing at least throughout 2010. Britain was represented by junior minister for business Ian Lucas. A spokesman said London has “always said we will offer aid” and that it would be consistent with commission state-aid competition rules. Verheugen said last week that he wanted to “avoid putting jobs up for auction” at GM Europe, known as Opel in most countries and Vauxhall in Britain. The EU’s competition and employment commissioners were also present. GM stunned the European auto sector earlier this month when it scrapped its decision to sell off its European operation to Canadian auto parts maker Magna International and Russian state bank Sberbank. The decision came amid growing political pressure surrounding a commission probe into suspected abuse of state-aid competition rules. View original post here: EU acts to quell GM jobs auction fears

Read the full story

By The Associated Press FRANKFURT, Germany – Germany warned fellow European governments on Monday against offering financial aid to General Motors Europe in exchange for job guarantees, hours ahead of a meeting in Brussels to discuss the future of the company. Economy Minister Rainer Bruederle told ARD television that business competition rests on the concept of not providing financial aid to companies. He said the EU should focus on its aid rules, which attempt to keep competition between companies and countries even by scrutinizing and limiting financial assistance from states. GM Europe is expected to meet later in the day with EU officials as well as representatives from European countries where the company has plants and business interests, including Germany, the U.K. and Spain. Earlier this year, Germany had offered GM Europe a large bridge loan and further loan guarantees if it sold the majority of its struggling European Opel and Vauxhall units to Canadian car parts maker Magna International Inc. (TSX: MG-A.TO ) and Russian lender Sberbank. In turn, Germany expected guarantees from Magna and Sberbank not to close any of its four German plants, which would have saved thousands of jobs. That plan was made by the previous German government – which Bruederle was not part of. He said he did not support such a solution. GM backed out of the sale and decided to restructure GM Europe on its own earlier this month. The company’s interim Chief Executive Nick Reilly said Friday that the main task at hand is to cut the division’s capacity by 20 to 25 per cent, which will most likely entail cutting thousands of jobs across Europe. Auto industry analyst Ferdinand Dudenhoeffer, meanwhile, said that GM would probably earn enough on its own this year to not need any aid from European governments. He said China and the U.S. home market would grow by more than 10 per cent, helping the company solve its own problems. Furthermore, he said, any state aid would create “ruinous competition,” in which the other German carmakers like Volkswagen AG, BMW AG and Daimler AG would suffer. Continue reading here: German politicians warn of effects of GM financial aid as European leaders meet

Read the full story

MINSK (AFP) – Scorned as Europe’s last dictatorship, ranked dismally by rating agencies and possessing few natural resources, Belarus has struggled to attract foreign investors. But now, in a push to revive its cash-strapped economy and lessen its dependence on Russia, the reclusive state is seeking to open up to the West and overturn its image as “the last remaining true dictatorship in Europe,” a label used by former US secretary of state Condoleezza Rice. At an economic forum in the capital Minsk this month, potential investors praised the country’s plans to form a new customs union with Russia and Kazakhstan from July 2010. As part of the bloc of ex-Soviet states, Belarus could become a gateway for businesses that want to break into the vast Russian market but are deterred by Russia’s corruption and red tape, they said. Unlike neighbouring Ukraine, Belarus has remained relatively insulated from the global financial crisis and offers investors a measure of political stability under strongman Alexander Lukashenko, in power since 1994. Other advantages touted by officials include the country’s pool of skilled labour and its developed infrastructure, as well as recent efforts to ease investment barriers by reducing taxes and reforming property rights. The International Monetary Fund (IMF) last month praised Belarus’ fiscal policies and response to the crisis, saying that authorities had also made progress on reforms to develop the private sector. Nevertheless, the reclusive state of 10 million people only has an economy the size of Sudan’s. It is one of the world’s lowest-rated countries according to Moody’s and Standards and Poor’s ratings agencies. The state still controls some 75 percent of the economy, with investors complaining of heavy-handed bureaucracy, a complex tax system and price controls. International businessmen were upbeat at the forum, however. They stressed the importance of the proposed customs union in eliminating trade barriers. “The customs union will make things easier. This will turn into a large domestic market,” Gerhard Hoesl, who heads German engineering giant Siemens in Belarus, told AFP. “This will help Belarus a great deal,” he added, comparing the role of the anticipated customs union to that of the EU economic bloc. The potential of the new customs union is being underestimated by the West, Dutch businessman Hennie Kuijken said: “Nobody realizes what will happen here in a short time.” For its part, Belarus is doing its utmost to publicize the impending deal. The executive secretary of the customs union, Sergei Glazyev, said the new bloc would increase the countries’ gross domestic product by 19 percent by 2015. Nonetheless, Belarus will find it difficult to transform its image as long as its economy remains predominantly under state control and opposition protests are regularly crushed by riot police. Continue reading here: Long-isolated Belarus appeals to foreign investors

Read the full story

ST.PETERSBURG, Russia (AP) — Russia’s President Dmitry Medvedev on Saturday chided officials in the ruling Kremlin-backed party with unprecedented bluntness, saying they should stop trying to manipulate elections and learn to win fairly. AP – Russian President Dmitry Medvedev speaks during a press conference during the European Union and Russia summit in Stockholm, … The statement was Medvedev’s strongest criticism yet of the United Russia party led by his predecessor and mentor, Prime Minister Vladimir Putin. United Russia controls parliament and serves as a power base for Putin, who has not ruled out a return to the presidency in 2012. While unusually direct, Medvedev’s statement appeared to be an attempt to respond to opposition criticism of recent local elections rather than mount a challenge to Putin. Speaking before a major party meeting in St. Petersburg also attended by Putin, Medvedev accused some of United Russia’s regional branches of using their dominance and official connections to shape the election results in their favor. He urged the party to “free itself of such people and shed such bad political habits.” “Elections must express the people’s will in free competition between ideas and programs, but they turn into a different story when democratic procedures are mixed with administrative ones,” he said, without elaborating. Most top federal and regional officials in Russia are United Russia members, and the opposition has accused the party of using its leverage to rig October’s regional elections. Independent election observers and opposition parties, including the Communists, protested what they said were mass electoral violations, citing evidence of multiple voting and ballot stuffing. Opposition candidates claimed they were hindered from campaigning and some were denied places on the ballot. Saturday’s statement contrasted with earlier remarks by Medvedev, who congratulated United Russia on winning a “convincing” victory while adding that claims of violations need to be investigated. “It’s necessary to modernize the party, make it more flexible and open,” Medvedev said Saturday. “You must learn to win in open struggle.” “Democracy isn’t for parties, either ruling or opposition ones, it’s for the people,” Medvedev said. He added on a softer note that United Russia is strong enough to retain its dominance without undermining democratic standards. Police detained 13 members of the National Bolsheviks, a banned leftist opposition group, as they were heading to the meeting to hand Medvedev a letter urging him to fire Putin, said Andrei Dmitriyev, a group leader. He said police accused them of crossing a street on a red light, which he denied. Dmitriyev told The Associated Press the petition also voiced support for Medvedev’s modernization drive, urged him to stop relying on United Russia and allow more political freedoms. Putin didn’t talk about the elections in his hour-long speech at Saturday’s meeting, but he warned party members against seeing it as an “elite prestige club” for personal career goals. Since assuming the presidency last year, Medvedev has sought to cast himself as a more liberal-leaning politician than Putin, who rolled back many post-Soviet freedoms during his eight-year presidency. Gleb Pavlovsky, a political strategist with close Kremlin connections, said that Medvedev’s statement was a signal that he wants United Russia to more actively embrace his political goals. “There is a gap between positions of the president, the prime minister and the party,” he said, adding that United Russia could eventually split into liberal and more conservative factions. Most observers point out, however, that Medvedev’s call for liberalization has been limited to words rather than actions, and see Putin as the man who continues to call the shots. Medvedev’s state-of-the-nation speech earlier this month focused on the need to shed Russia’s dependence on oil and gas exports and ease an inflated state role in the economy. It was interpreted by some analysts as a sign of his desire to distance himself from Putin and shed his legacy. But Putin made similar calls for easing dependence on raw materials in his speech at Saturday’s meeting and hailed Medvedev’s modernization goals. Putin also took the credit for recent signs of economic recovery and pledged that his Cabinet would continue to support industries hit by the economic crisis, including the troubled carmaker AvtoVAZ. He said that Russia’s gross domestic product would fall by 8-8.5 percent this year, less than initially expected, and that the nation should regain the pre-crisis economic potential in two or three years. Associated Press writer Vladimir Isachenkov in Moscow contributed to this report. Read the original: Russia president criticizes ruling party over vote (AP)

Read the full story

ST.PETERSBURG, Russia (AP) — Prime Minister Vladimir Putin says Russia must modernize its economy and reduce its dependence on raw materials exports. Putin’s call for developing high-tech industries echoes statements by his successor and protege, President Dmitry Medvedev. Putin and Medvedev both attended Saturday’s meeting of the dominant United Russia party in St. Petersburg. United Russia is a power base for Putin, who has not ruled out a return to the presidency in 2012. Putin has praised Medvedev’s recent state-of-the-nation speech that focused on industrial modernization. Putin has also taken the credit for recent signs of economic recovery and pledged that his Cabinet would continue to support industries hit by the economic crisis. Continue reading here: Putin calls for modernization of Russian economy (AP)

Read the full story

ANKARA (AFP) – Turkey on Friday scrapped a 2008 tender won by a Russian-led consortium to build the country’s first nuclear power plant — a process that had been under threat of being invalidated by a court decision. In a brief statement, the state-run electricity wholesaler TETAS said its board of directors decided “unanimously” to cancel the tender, citing an article in the bid specification that gave it the authority to scrap the process without any liability. A consortium led by Atomstroyexport, Russia’s state nuclear giant, had been the only bidder in the tender to build four nuclear reactors with a total capacity of 4,800-megawatts at Akkuyu, in the Mediterranean province of Mersin. TETAS’s decision comes ten days after a top administrative court suspended parts of the regulation governing the tender before moving on to review a demand by a civil society of engineers to cancel the process. Energy Minister Taner Yildiz had said at the time that his ministry would not appeal against the court’s decision. He had also added that his ministry would open a new tender for a nuclear reactor at Akkuyu and another at the Black Sea city of Sinop if the current tender was cancelled. The tender process had been under fire since it emerged that only one consortium had bid for the project and offered an above-market price for supplying electricity to the Turkish grid. The consortium, which also includes Russia’s Inter Rao and Turkey’s park Teknik, later revised its unit price of 21.16 cents per kilowatt per hour down to about 15 cents, but Ankara said the new offer was also high. During a visit to Ankara in August, Russian Prime Minister Vladimir Putin argued the price was below international market levels as he signed a series of energy cooperation deals with Turkey. Turkey, on the other hand, had said the state could take as much as a 25 percent-stake in the project if the consortium lowered its price further, triggering criticism that such a move would amount to unfair competition. The tender was held in September, amid global financial market turbulence, with Ankara rejecting requests by interested companies for a postponement. AECL of Canada, Vinci Construction Grand Projects of France, Itochu Corp. of Japan, China Nuclear Power Components and Germany’s RWE were among the companies that had initially picked up bid specifications. Turkey plans to build three nuclear power plants in hopes of preventing a possible energy shortage and reducing dependence on foreign supplies but the project is fiercely opposed by environmentalists. Ankara scrapped an earlier plan to build a nuclear plant at Akkuyu in 2000 amid a severe financial crisis and protests from environmentalists in Turkey, Greece and Cyprus. Critics say Akkuyu is close to a seismic faultline, pointing at a powerful earthquake that killed more than 140 people in the neighbouring province of Adana in 1998. Read the r est here: Turkey scraps nuclear power plant tender

Read the full story

KIEV (AFP) – Ukraine will double the fees it charges Russia for gas shipped through its territory to European customers from 2010, Prime Minister Yulia Tymoshenko said on Wednesday, in a move that could raise tensions. “The transit price of Russian natural gas through Ukrainian territory will be doubled from January 1, 2010,” Prime Minister Yulia Tymoshenko said in a statement released by the government. The decision comes ahead of a key meeting on Thursday between Tymoshenko and her Russian counterpart Vladimir Putin, who has warned a gas payment dispute with Kiev could disrupt supplies to Europe. The fee is currently 1.7 dollars per 1,000 cubic metres of gas per 100 kilometres. Ukrainian gas monopoly Naftogaz said in September that this would be raised to between 2.7 and 2.8 dollars in 2010. Ukraine is one of the countries hardest hit by the global economic crisis. A gas dispute between Russia and Ukraine led to a cut-off of Russian gas supplies across much of Europe for two weeks in January this year. Around a quarter of the European Union’s gas supply comes from Russia. Read more from the original source: Ukraine slaps Russia with higher gas fees

Read the full story

BRUSSELS (AFP) – The EU commission has invited General Motors and EU economic ministers to meet in Brussels on Monday to discuss the future the US automaker’s Opel and Vauxhall plants in Europe, an EU spokesman said. The spokesman for EU Industry Commissioner Guenter Verheugen, confirming a German media report, said the meeting had been called “to talk about plans for the European operations.” The aim is to talk about the future of GM Europe and to “coordinate,” he said. General Motors jolted the European auto sector earlier this month when it scrapped a decision to sell off its European operation to Canadian auto parts maker Magna International and Russian state bank Sberbank. The US company decided instead to hold on to Opel and Vauxhall and restructure the European unit itself. Germany had backed the planned sale and offered several billion euros in aid to support the transaction. “The (EU) commission is strictly opposed to a race for subsidies” to finance the restructuring of GM’s European unit, Verheugen told the German Rheinische Post newspaper in an interview to appear in its Wednesday edition. “We need a European solution based strictly on economic criteria,” he said. The newly named head of GM Europe Nick Reilly is expected to attend the session. Germany is home to about 25,000 Opel workers, roughly half of GM Europe’s total workforce, and the government had lobbied hard for Magna’s bid in hopes of keeping all the German plants running. Other European countries where Opel has factories like Britain, home to Vauxhall, along with Spain and Poland feared they would bear the brunt of the sale. There are also GM Europe plants in Austria, Belgium and Hungary. The proposed deal also caught the attention of EU regulators, which before GM slammed on the brakes were checking whether German aid was only offered to Magna, and not to other bidders, and therefore broke EU rules. The German government could now decide to assist Opel through a fund created to help companies hit by the global economic crisis. Verheugen said such an approach was possible but would have to adhere to “strict conditions.” The EU commission has organised two other coordinating meetings on the issue, in March and May. See the original post: EU, GM to meet on Opel: spokesman

Read the full story

BERLIN (AFP) – European Union Industry Commissioner Guenter Verheugen will meet next Monday with EU economy ministers and representatives from General Motors to discuss the future of GM unit Opel, a German newspaper reported. “The (EU executive) commission is strictly opposed to a race for subsidies” to finance the restructuring of GM’s European unit, which employs around 50,000 people in several European countries, including Germany, Britain, Spain and Poland, he told the Rheinische Post in an interview to appear in its Wednesday edition. “We need a European solution based strictly on economic criteria,” he said. The newly named head of GM Europe Nick Reilly is expected to attend the session. General Motors jolted the European auto sector earlier this month when it scrapped a decision to sell German-based Opel and said it would hold on to and restructure the unit itself. Germany had backed the planned sale to Canadian auto parts maker Magna International and Russian state bank Sberbank and offered several billion euros in aid to support the transaction. The German government could now decide to assist Opel through a fund created to help companies hit by the global economic crisis. Verheugen said such an approach was possible but would have to adhere to “strict conditions.” Read the original post: EU, GM to meet on Opel: report

Read the full story

KIEV (AFP) – The EBRD on Tuesday criticised Ukraine for failing to reform its energy sector and said it would delay a decision on a crucial loan amid fears of another gas crisis between Moscow and Kiev. “We would like to see that Ukraine is ready to proceed with some reforms” of the energy sector and of gas monopoly Naftogaz in particular, said Anton Usov, a Kiev spokesman for the European Bank for Reconstruction and Development (EBRD). “Unfortunately we have not seen that.” Usov said the EBRD would now consider “next year” a request from Naftogaz for a 300-million-dollar (202-million-euro) loan that was to have been decided on Tuesday at a meeting of the EBRD’s board of directors in London. Naftogaz is already heavily indebted and has been struggling to pay Ukraine’s bills for gas supplies from neighbouring Russia. Ukraine is one of the countries hardest hit by the global economic crisis. Russian Prime Minister Vladimir Putin has warned gas supplies to Europe could be affected if Ukraine fails to pay its bills. But Naftogaz spokesman Valentin Zemlyansky said the EBRD’s move would have “little effect” on the company. Previous rows over gas payments and prices between Moscow and Kiev have led to cut-offs to the European Union in 2006 and 2009 of Russian natural gas pumped through pipelines running across Ukrainian territory. Europe depends on Russia for around a quarter of its gas supplies. Read the original here: EBRD slams Ukraine over reforms, delays loan

Read the full story

* CEDC to pay $510 million for remaining stake * To spend $297 million on Russian Alcohol debt refinancing * Offer to be launched on Nov. 23 (Adds detail, background) MOSCOW, Nov 16 (Reuters) – Polish vodka maker Central European Distribution Corp ( CEDC.O ) is set to take 100 percent control of Russian Alcohol by the end of 2009 in an agreed deal which could pave the way for consolidation of assets in its main market. CEDC — which relies on Russia for over half of its revenues and almost 50 percent of its operational profits — wants to acquire the 37.8 percent stake it does not already own for $510 million, its documents showed. To pay for the deal, the Polish company hopes to raise around $1.2 billion via a public share offering [ID:nWNAB4888] and a placement of $870 million in senior secured notes maturing in 2016. As well as bringing its stake in Russia’s largest spirit producer to 100 percent, CEDC intends to spend $297 million on refinancing Russian Alcohol’s debts. The Russian company’s second biggest shareholder is Lion Capital LLP, which has 21.87 percent. CEDC has preliminary agreement from the other shareholders in Russia Alcohol for the deal and will launch the share purchases on Nov. 23. It aims to complete the process by Dec. 23. The deal is yet to be approved by Russia’s anti-monopoly watchdog, FAS. Once the deal with Russian Alcohol is complete, CEDC plans to start consolidating its Russian assets into one company to improve operating profits. The assets include Parliament, maker of the vodka of the same name, and a stake in Russian importer of spirits and wines, The Whitehall Group. (Reporting by Maria Plis; Writing by Toni Vorobyova; Editing by David Cowell) © Thomson Reuters 2009 All rights reserved Continued here: UPDATE 1-CEDC to buy rest of Russian Alcohol for $510 mln

Read the full story

MOSCOW (AFP) – Russia’s deputy prime minister on Sunday said his government could support French company Renault taking control of troubled carmaker Avtovaz, but will have to find other investors if it declines. “If the Renault-Nissan alliance wishes to increase its participation to the point where it takes control, Russia will not be against it,” Igor Shuvalov said in an interview with Russian television station Vesti-24. Should Renault decline, “we will have to go to other potential partners and investors,” he said. “The state is shouldering a substantial part of the debt burden by settling social matters linked to employment, but that means that all shareholders — Russian and foreign — will have to present an appropriate development programme for the company.” Renault currently holds a 25 percent stake in Avtovaz, which plans to cut a quarter of its workforce in the face of shrinking sales in Russia’s first recession in a decade. Russian Prime Minister Vladimir Putin had earlier pressed Renault to take part in rescuing Avtovaz, maker of the iconic Lada brand. Renault said this month it would hold on to its 25 percent stake in the carmaker and contribute to its restructuring, but would not take part in a capital increase. Putin said on November 5 that the Russian government will settle Avtovaz’s debt and invest millions of dollars to bail out the company. The government will budget 38 billion roubles (1.3 billion dollars, 878.6 million euros) to cover Avtovaz’s debts, 12 billion roubles to build a new assembly plant and 4.8 billion roubles to create new jobs, he said. The car giant, which employs about 100,000 people, has repeatedly warned it could file for bankruptcy if unable to restructure its debt. Link: Russia suggests Renault take control of Avtovaz

Read the full story

PITTSBURGH (AP) — About 37 percent of U.S. Saab dealers will close as part of General Motors Corp.’s planned sale of the ailing Swedish car brand to Koenigsegg Group AB, a GM spokeswoman said Saturday. GM spokeswoman Ryndee Carney said the company had sent letters to 81 of the 218 U.S. Saab dealers notifying them they will be expected to terminate their dealerships when the sale closes around the end of November. The remaining 137 dealers will continue operating under Saab Cars North America, a newly formed company that will run the brand under Koenigsegg’s ownership. All the U.S. Saab dealers had signed deferred termination agreements during GM’s reorganization under bankruptcy protection earlier this year. Mike Colleran, chief operating officer of Saab Cars North America, said the company chose dealers based on their potential to make money. “We selected a network that gives us the best opportunity to achieve that,” he said. Saab Cars North America sent letters to those dealers notifying them they’d been selected to continue if the sale closes, he said. Koenigsegg Group signed a deal to buy the troubled Saab brand from GM in August. The consortium is led by the Swedish sports car maker Koenigsegg Automotive AB, Norwegian investor Baard Eker and Augie Fabela II, co-founder and former chairman of Russian telecom operator VimpelCom. See the rest here: GM: 37 pct of US Saab dealerships to close (AP)

Read the full story

BERLIN (AFP) – General Motors will have to spend at least twice the three billion euros (4.5 billion dollars) it is budgeting to turn around its European unit Opel/Vauxhall, a union chief predicts. “I think that a restructuring involving a progressive strategy will cost more than six billion, or nearer seven billion euros,” Armin Schild, an IG-Metall official who sits on Opel’s supervisory board, told the weekly Witschaftwoche. “I am wondering where the money will come from,” he said in an interview to be published in Monday’s edition of the magazine. International ratings energy Moody’s has estimated the cost of the restructuring at five billion euros, according to a German press report on Tuesday. General Motors on Tuesday named executive vice president Nick Reilly as interim head of the unit to “oversee the creation of a strategy to position Opel/Vauxhall for long-term success.” The US giant had signed a preliminary deal in September to sell a majority stake in Opel but changed its mind last month, embarrassing the German government and raising fears of sizeable job cuts. Berlin had strongly backed a sale to Canadian auto parts maker Magna International and state-owned Russian lender Sberbank, but roused suspicions that it was in return for lower job losses in German plants. Other European countries where Opel has factories like Britain, home to Vauxhall, Spain and Poland, feared they would bear the brunt of the sale. The proposed deal also caught the attention of EU regulators, which before GM slammed on the brakes were checking whether German aid was only offered to Magna, and not to other bidders, and therefore broke EU rules. Berlin may finally cough up aid in any case, as GM asks European governments including Germany to provide part of the cash it needs to turn Opel around. The weekly Der Spiegel predicted Saturday that despite some argument within the new centre-right coalition government, Chancellor Angela Merkel and Finance Minister Wolfgang Schaueble were prepared in principle to assist GM. However union leader Schild expressed doubt that GM had executives competent to restructure Opel or would give them sufficient autonomy. See the article here: Opel turnaround ‘would cost GM twice as much’

Read the full story

STOCKHOLM–(BUSINESS WIRE)–Regulatory News: TeliaSonera and Altimo have agreed to combine their ownership interests by contributing their respective direct and indirect interests in Turkcell and Megafon, into a new company. The new company will be established in a western jurisdiction and listed on the New York Stock Exchange. The purpose is to create a leading international operator, with over 90 million subscribers in Russia, Turkey and the CIS countries, and with well functioning corporate governance. The new company will focus on developing the operational excellence of Turkcell and MegaFon as well as expanding into new emerging markets. The main advantages of establishing the new company is that the control over and liquidity of the assets will improve. This will be achieved by simplifying the shareholder structure of both Turkcell and MegaFon, listing the new company, agreeing on a long term dividend policy and paying regular dividends. Once established, the new company will own a majority of the shares in both Turkcell and Megafon. AF Telecom, the third major shareholder in Megafon, is also invited to join the partnership. Provided AF Telecom joins, TeliaSonera and the Russian investors will have substantially similar ownership and equal influence over the new company. None of the major shareholders will have the possibility to acquire control over the new company other than by consent of the other major shareholders. The board will include independent board members, who will be able to resolve any deadlocks, if board members nominated by one of the major shareholders have a different opinion from the board members nominated by the other major shareholders. The chairman of the new company will be elected among the independent board members. Turkcell and Megafon are both efficient and professionally managed mobile operators and regarded as national champions. Therefore, the intention is to continue to manage them as separate operations, irrespective of the changes in their ownership structure. Turkcell and Megafon will both benefit from being part of a major international telecom group with possibilities to extract synergies and share know-how. TeliaSonera and Altimo have agreed to collaborate and align their efforts to resolve all ongoing legal disputes between each of them and Çukurova Group to make the establishment of the new company possible. Such collaboration is expected to result in a speedy resolution of the disputes. Subject to their satisfactory resolution, the parties have agreed that Altimo acquires Çukurova Group’s indirect shareholding in Turkcell and contributes those shares to the new company without any premium. In order to avoid potential future conflicts, the parties have agreed that Altimo will support that TeliaSonera, being the controlling shareholder of Fintur Holdings with a right of first refusal in respect of any sale of the Fintur Holdings shares, acquires 100 percent of Fintur Holdings by buying Turkcell’s shares in the company at fair market value. The agreement signed between TeliaSonera and Altimo is legally binding, but the transaction is subject to agreement on definitive documentation and regulatory approvals. Lars Nyberg, President and CEO of TeliaSonera, said:   “I am very pleased that we have reached an agreement with Altimo to combine our efforts in resolving the legal disputes, which have been going on far too long. But the real value of the agreement is in the execution of it. The shareholder structure and control of Turkcell and Megafon will improve, as well as the liquidity of these assets. We have focused on creating a governance structure where all major parties will have good possibilities to influence, without single-handedly controlling, the management of the new telecommunications group. There is also very little risk of disruptive deadlock situations. It may take some time before we reach the end result, but the new listed company will have exciting future prospects and add value to our shareholders”. Alexei Reznikovich, CEO of Altimo, said:   “We believe that this agreement will help both parties find a way out of the lengthy Turkcell shareholder deadlock. Our companies are natural partners whose stakes in Megafon and Turkcell create control when combined together. This is a good basis for finding mutual business understanding and establishing a new global leader in mobile telecoms. The benefits of the deal are evident. We aim at creating a leading and one of the most dynamic players in the emerging markets with huge potential for further expansion. The new operator will possess broader possibilities for business development and expansion into other emerging markets bringing high quality services for subscribers and more value for all shareholders”. Notes to editors: The ownership of Turkcell has been subject to several legal disputes since the former controlling shareholder, Çukurova, effectively sold the same shareholding interest twice, first to TeliaSonera and then to Altimo. TeliaSonera has received a ruling from an arbitration tribunal of the International Chamber of Commerce in Geneva, stating that the share purchase agreement is valid and that Çukurova shall deliver its indirect controlling shareholding interest in Turkcell to TeliaSonera. Subsequent to agreeing to sell such shareholding interest to TeliaSonera, Çukurova sold a portion of its indirect controlling interest in Turkcell to Altimo and pledged a further indirect controlling interest in Turkcell in exchange of a loan, which Altimo claims Çukurova later defaulted on. As a result, Altimo has claimed in legal proceedings in the British Virgin Islands that they have validly appropriated such indirect controlling shareholding interest in Turkcell, due to the default by Çukurova. Altimo specializes in telecoms investments in Russia, the CIS and Asia. Its stakes include: 44% of the voting interest in VimpelCom, one of Russia’s two biggest mobile phone companies (NYSE: VIP – News ); 25.1% of Megafon, the third largest GSM provider in Russia; 43.5% of Kyivstar, Ukraine’s largest mobile phone company; and 4.99% of Turkcell, Turkey’s largest mobile company (NYSE: TKC – News ). Together, Altimo’s investee companies have more than 160 million mobile phone subscribers. Fintur Holdings is a joint venture between TeliaSonera and Turkcell, in which TeliaSonera owns 58.55 percent and Turkcell 41.45 percent. Fintur is the major shareholder of leading mobile operations in Kazakhstan, Azerbaijan, Georgia and Moldava. Mr Lars Nyberg, President and Chief Executive Officer of TeliaSonera will participate. Press identification card or similar is required to attend. Possibility to listen to the press conference via telephone You can also listen to the press conference live over the phone. However, there will be no possibility to ask questions via telephone. Mr Lars Nyberg, President and Chief Executive Officer of TeliaSonera will participate. You can listen to the analyst conference over the phone and also ask questions. TeliaSonera AB discloses the information provided herein pursuant to the Swedish Securities Markets Act and/or the Swedish Financial Instrument Trading Act. The information was submitted for publication at 07.00 a.m. CET on November 12, 2009. Forward-Looking Statements Statements made in the press release relating to future status or circumstances, including future performance and other trend projections are forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There can be no assurance that actual results will not differ materially from those expressed or implied by these forward-looking statements due to many factors, many of which are outside the control of TeliaSonera. TeliaSonera provides telecommunication services in the Nordic and Baltic countries, the emerging markets of Eurasia, including Russia and Turkey, and in Spain. We are the leading European provider of quality cross-border voice, IP and capacity services, provided through our wholly-owned international carrier network. In 2008, TeliaSonera’s net sales amounted to SEK 104 billion, and at the end of December 2008 the total number of subscriptions was 135 million in 20 countries. The TeliaSonera share is listed on NASDAQ OMX Stockholm and NASDAQ OMX Helsinki. Simplicity and service are important tools for us in creating profitable growth and value for our customers and shareholders. Read more at www.teliasonera.com This information was brought to you by Cision http://www.cisionwire.com See the original post here: TeliaSonera and Altimo combine their ownership interests in MegaFon and Turkcell (Business Wire)

Read the full story