Russia

In a victory for Moscow, a Dutch court on Wednesday overturned an order that Russia pay $50 billion to shareholders in defunct oil company Yukos, saying that the Hague-based Permanent Court of Arbitration had no jurisdiction, the Irish Times reported. Former Yukos shareholders said they would appeal the surprise decision, which could impact earlier rulings in Belgium and France that four former shareholders were entitled to seize Russian state assets to compensate them for the loss of the oil giant.

Russian coal and steel producer Mechel said on Monday it had agreed a debt restructuring deal with the country's biggest bank Sberbank totalling 30 billion roubles ($446 million) and $427 million, Reuters reported. The mining company, controlled by businessman Igor Zyuzin, borrowed heavily before Russia's economic crisis and has struggled to keep up repayments as demand for its products weakened alongside tumbling coal and steel prices.

Across the global oil patch, from Texas to the North Sea, drilling rigs are standing idle as energy companies respond to the slump in crude prices by cutting investments. Not so in the swampy Siberian marshes that are Rosneft’s heartland, the Financial Times reported. At Yuganskneftegaz, the production subsidiary that accounts for more than one-tenth of the country’s oil output, the state-controlled Russian oil company doubled its drilling rate during 2015.

The number of Russians living below the poverty line rose to the highest levels in nearly a decade in 2015, as the oil-dependent economy suffered a second year of recession, data showed Monday, The Wall Street Journal reported. Years of high crude oil prices had pushed Russian’s living standards up, but a recent sharp drop in prices has left Russia’s economy stuck in a recession despite government claims that the worst is over.

The head of Russia's ailing state development bank Vnesheconombank (VEB) could be replaced soon by a senior banker from Sberbank, four sources familiar with the situation told Reuters on Wednesday. Three of the sources said the decision to replace VEB's Vladimir Dmitriev with Sberbank Deputy Chairman Sergei Gorkov could be announced as soon as Thursday. Government officials have been discussing for months how to rescue VEB, which finds itself saddled with toxic assets totalling over $12.6 billion and is at risk of failing to meet its debt repayments.

Russia's Gazprombank will receive Mechel's Elga coal project in exchange of paying off some of the coal and steel company's debt to Sberbank, according to preliminary debt restructuring deal, two banking sources told Reuters. The agreement is a part of a wider restructuring process, announced by Mechel this month, which involves Sberbank, Gazprombank, VTB and a consortium of international lenders. The restructuring process, if approved by Mechel's shareholders next month, will mark the end of two years of talks between the company and creditors.

Russian coal and steel producer Mechel has reached debt restructuring agreements with its major creditors after two years of negotiations on a debt pile it said had threatened the company's survival, Reuters reported. The mining company controlled by businessman Igor Zyuzin borrowed heavily before Russia's economic crisis and has struggled to keep up repayments as demand for its products weakened alongside tumbling coal and steel prices.

Conspicuous consumers helped some luxury brands report their best-ever results in Russia in 2015, even as overall retail sales dropped 10 percent, Bloomberg News reported. About half of Russians can barely afford purchases beyond food and other basics, according to national polls. Some global luxury brands are betting the trend will continue, opening new shops across the Russian capital. GUM, the ornate department store across Red square from the Kremlin, saw Bulgari and Jimmy Choo boutiques open late last year, while Hermes doubled its selling space, according to a GUM spokeswoman.

Russia is lining up seven major state companies, including Aeroflot, Alrosa, the diamond miner, and Rosneft, for potential privatisation as the Kremlin debates drastic options to replace dwindling oil revenues, the Financial Times reported. The decision to consider the first such comprehensive push in years comes as the latest slide in crude prices is expected to drive Russia into a second year of recession and has ripped a gaping hole in its budget.

Russia’s economy shrank 3.7 per cent in 2015, the worst drop since the depths of the global financial crisis, as the country struggled with a drop in the price of its oil exports and international sanctions, the state statistics service said Monday, The Globe and Mail reported. The decline is the sharpest for Russia since 2009, when the world economy was suffering from the effects of a credit crunch and financial crisis. It matched the most recent prediction from the IMF, which forecasts another fall of 1 per cent in 2016 before a return to 1 per cent growth next year.