Russia

Russian billionaire Oleg Deripaska's Central European Aluminum Company (CEAC) is suing Montenegro for 100 million euros ($140 million) over the failure of its aluminum plant there, Reuters reported. A statement issued in Cyprus, where the Russian company has its headquarters, CEAC said the case will heard in Vienna. The statement said Montenegro violated a 2010 settlement agreement, leading to the plant going bankrupt. In a separate statement, Montenegro's government denied any wrongdoing.

Russia’s central bank has warned that Russia’s consumer lending sector threatens the country’s “financial stability”, the same day that it revoked the licence of Master Bank, a midsized retail lender, the Financial Times reported. Addressing the Russian Duma, central bank head Elvira Nabiullina reiterated the need for setting a maximum interest rate level for consumer loans due to growing concerns of a bubble in the sector.

Russian state-controlled bank VTB has agreed to join other creditors in restructuring mining group Mechel's $9.6 billion debt, a source close to VTB said on Saturday, Reuters reported. The coal-to-steel group, controlled by Igor Zyuzin, borrowed heavily to pay for acquisitions even after the 2008-2009 global economic slump, leaving it dangerously exposed to a global industrial downturn. VTB had been resisting a restructuring deal in which Mechel wanted a waiver of loan covenants and delays to its debt repayments, bankers familiar with the negotiations say.

Russia's mining giant Norilsk Nickel has no plans to help bail out financially-troubled Finnish nickel miner Talvivaara, a source familiar with the Russian company's plans said, Reuters reported. Talvivaara said earlier on Thursday it was in talks with stakeholders to secure funds after a series of production disruptions at its Sotkamo mine and a fall in nickel prices put it at risk of bankruptcy. Norilsk Nickel, the world's biggest nickel and palladium producer, is Talvivaara's main customer and owns a 0.64 percent stake in the company.

Officials from cash-strapped Italian flagship carrier Alitalia SpA. will travel to Moscow next week to sound out Aeroflot's about an alliance, a person close to Alitalia said on Saturday, The Wall Street Journal reported. The person, who spoke on condition of anonymity, confirmed local news reports about the visit but didn't elaborate. Aeroflot wasn't immediately available for comment. Alitalia is looking for partners and Italian Transport Minister Maurizio Lupi said the government will consider others apart from Air France-KLM, AF.FR -3.80% which has a 25% stake in the carrier.

A group representing leading Russian banks called for the Bank of Russia to sacrifice its ambitious plan to tame inflation in order to support flagging economic growth, The Wall Street Journal Emerging Europe blog reported. The Association of Regional Banks of Russia, a lobbying group that represents nearly half of all Russian banks, wrote in an open letter to the central bank’s governor Thursday saying that the bank’s attempt to bring inflation down to 5% next year is unlikely to succeed, and could impede growth that has already slowed to 1.5% in the first nine months of this year.

Russia’s government is temporarily seizing $7.6 billion in savings from non-state pension funds while it carries out inspections, a move critics say looks like a “confiscation” aimed at plugging a hole in next year’s state budget, The Wall Street Journal Emerging Europe blog reported. Prime Minister Dmitry Medvedev told ministers Thursday that the government needs to check that the money Russians channel to private pension funds is safe. To do this, it will seize 244 billion rubles ($7.6 billion) from non-state pension funds and put them into the state pension fund.

When European leaders engineered a harsh bailout deal for this tiny Mediterranean nation in March, they cheered the end of an economic model fueled by a flood of cash from Russia. Wealthy Russians with money in Cyprus’s sickly banks lost billions. But the Russians, though badly bruised, are now in a position to get something that has previously eluded even Moscow’s most audacious oligarchs: control of a so-called systemic financial institution in the European Union, the International Herald Tribune reported.

Russians who used the offshore haven of Cyprus before the collapse of the island’s banking system appear to have shrugged off the Kremlin’s calls to bring back their money to the motherland, instead opting to park their cash in the British Virgin Islands, data from the Russian central bank suggest, The Wall Street Journal Emerging Europe blog reported.

President Vladimir Putin is seeking ways to shore up the economy as corporate credit dries up amid policy makers’ reluctance to cut interest rates in the face of above-target inflation, Bloomberg reported. The economy grew 1.2 percent from a year earlier in the second quarter, the slowest pace since 2009, as investment shriveled. That may mean Russia has entered its second recession in five years, according London-based to Capital Economics Ltd.