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Sweden to Give Ukraine $100 Million No-Interest Loan

Kiev:

Ukrainian President Petro Poroshenko today thanked the Swedish government for a $100 million loan for Kiev’s cash-strapped economy, one piece of a multi billion dollar package the country needs to avoid collapse.

“The government of Sweden has taken the decision to provide a $100 million loan to Ukraine,” Poroshenko said in a joint press conference with Swedish premier Stefan Loefven who is on a visit to the Ukrainian capital.

“The Swedish government is taking care of the interest on this loan themselves,” Poroshenko said, thanking Loefven for the decision and calling Sweden “a true friend of Ukraine” though without immediately clarifying the details of the loan.

Ukraine’s international partners are expected to put together an aid package worth around $40 billion over four years.

The cornerstone of that would be an IMF bailout of $17.5 billion over the next four years, with the IMF expected to make a decision later Wednesday over the funding.

Poroshenko voiced confidence in a positive outcome.

“I am sure that today there will be a positive decision (on the IMF loan),” Poroshenko said. “Today it will be a historical decision.”

Analysts have said Ukraine has but a few months before its economy collapses, making the loan a crucial lifeline. Kiev says it has met all the requirements to qualify for the bailout by pushing through a package of draconian reforms in recent weeks which included tripling the price of gas for households.

The austerity measures come on top of an already crippled economic base where a lot of the country’s industrial core in the east has either stopped working or was physically destroyed in the fighting with pro-Russia separatists.

Last week Ukraine’s central bank considerably hiked its base interest rate to 30 percent to stem further depreciation of a plummeting hryvnia and combat inflation.

“When I am asked how much financial assistance I expect, I say — the more the better,” said Poroshenko. “The total package being put together to help Ukraine… should be over $40 billion today.”

Related

NATO ‘Disppointed’ By Russian Withdrawal From Arms TreatyNATO Chief Jens Stoltenberg Says Russia Still Equipping Ukraine RebelsUkrainian Soldier Killed in Clashes Despite Weapons Pullback […]

Home Credit and Finance Bank Selects Earnix Banking Solution to Enhance Analytics Capabilities

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Earnix

The use of our product enables our customers to stay ahead of their competition. We are looking forward to a long-term relationship with the bank’s analytical teams and managers

Tel Aviv, Israel (PRWEB) November 21, 2014

Earnix, a leading provider of integrated pricing and customer analytics solutions for banking and insurance, announced today that Moscow-based Home Credit and Finance Bank, has selected the Earnix Banking solution to enhance the bank’s analytics capabilities and optimize its strategies for its cash loan portfolio.

The Earnix platform helps banks eliminate the “guesswork” when it comes to decision making. Earnix Banking predicts, simulates and optimizes customer interactions to efficiently achieve business goals such as profitability, market growth or long-term customer retention. Home Credit will be implementing the Earnix Banking solution as part of a two phase project, beginning with data analytics and modeling, followed by optimization of its cash loan portfolio and field testing.

“We are extremely proud that Home Credit & Finance Bank, the leading player in POS finance in Russia, selected the Earnix software”, said Amitai Ratzon, VP of Sales at Earnix. “The use of our product enables our customers to stay ahead of their competition. We are looking forward to a long-term relationship with the bank’s analytical teams and managers”.

About Home Credit & Finance Bank, LLC
Home Credit & Finance Bank specializes in retail finance in Russia and Kazakhstan. HCFB offers its clients a wide range of credit products and banking services. The Bank’s database comprises over 30.2 million contacts. HCFB’s products are distributed through over 93,000 points of sale in Russia and Kazakhstan. The Bank’s network also comprised 9,733 branches and offices and 1,293 ATMs across the Russian Federation and Kazakhstan as of 30 June 2014.

Apart from a full range of consumer lending products HCFB offers current and saving accounts and a comprehensive range of deposit products, including salary accounts. Having a vast client database, HCFB is successfully utilizing its cross-selling opportunities to further expand its coverage. HCFB utilizes direct mail, telemarketing, on-line sales and various forms of partnerships (e.g. agreements with insurance providers in Russia, third party brokers or via direct collaborations with employers).

About Earnix
Earnix Integrated Pricing and Customer Analytics software empowers financial services companies to predict customer risk and demand and their impact on business performance, enabling the alignment of product offerings with changing market dynamics. Earnix combines predictive modeling and optimization with real-time connectivity to core operational systems, bringing the power of analytic driven decisions to every customer interaction. Banks and insurers rely on Earnix solutions to improve deposit, loan, and insurance policy offerings. For more information, visit http://www.earnix.com.

Contact person:
Aviv Cohen, Vice President of Products & Marketing
Earnix Ltd.
aviv(at)earnix(dot)com
+972-3-753-8292


[…]

Ukraine unlikely to receive IMF loan tranche this year – finance minister

* IMF $2.7 bln loan tranche unlikely in 2014

* Kiev in dire need of cash to pay gas bills

* Minister says gas deal with Russia unlikely on Wednesday

By Natalia Zinets

KIEV, Oct 28 (Reuters) – Ukraine is unlikely to receive a second tranche of a $17-billion loan programme from the International Monetary Fund this year as expected, Finance Minister Oleksander Shlapak said on Tuesday, in the latest economic blow to the debt-ridden country.

Ukraine, which has been fighting pro-Russian separatists in its east and struggling to resolve a months-long gas pricing dispute with Moscow, badly needs cash to support its budget, pay off debts and prop up its faltering hryvnia currency.

Kiev had expected that a second tranche, worth $2.7 billion, of the IMF bailout would come in December after the Fund’s mission was due later this month. But Shlapak said an IMF visit was unlikely before a new government was formed.

President Petro Poroshenko hailed a sweeping victory for pro-Europe parties in parliamentary election on Sunday, but it may take a month or more before a new cabinet takes over.

“An (IMF) mission will come when a new government is in place,” Shlapak told journalists. “They want to talk to a new government. The key question would be the adoption of a realistic 2014 budget.”

He added that most likely, the tranche would be postponed until next year.

“The maximum that we would like to achieve is to get an IMF decision (on the tranche disbursement this year),” he said.

The mission will also decide how much additional financial aid Kiev may need, after warning in September that if Ukraine’s conflict with the separatists runs into next year, the country may need as much as $19 billion in extra aid.

GAS MONEY

The delay of the disbursement means that Kiev can only count on 760 million euros in aid from the European Union this year.

Ukraine’s finance ministry says it has enough funds to cover its external debt obligations until the end of January, but Kiev has asked Europe for an additional $2 billion euros to cover its gas company Naftogaz’s bills for the current heating season.

“The plan envisages purchases of a maximum 7 billion cubic metres of gas by the end of this heating season,” Shlapak said. “Naftogaz does not want to err and therefore we’re working on additional funding, we’re asking everyone we can.”

Russian President Vladimir Putin said on Friday he hoped Moscow and Kiev would finally reach a deal to end their gas dispute, in which Moscow has halted supplies to Ukraine.

The Russian and Ukrainian energy ministers are expected to hold talks with the European Commission in Brussels on Wednesday over Ukraine’s unpaid bills and the price Kiev pays for its gas.

Shlapak said a deal there was unlikely.

“I have the impression that the Russian side does not want to negotiate,” he said. “The conditions that are proposed do not stand up to criticism.”

Putin has appealed to the West to help Ukraine raise funds to pay for its gas supplies, adding that Kiev already owed Moscow $4.5 billion for deliveries last year and this.

Ukraine must pay $3.1 billion of that by the end of the year, which could cause a huge dent in the country’s gold and foreign reserves. They currently stand at $16 billion.

(Writing by Lidia Kelly, editing by Elizabeth Piper and Gareth Jones)

Politics & GovernmentBudget, Tax & EconomyUkraineInternational Monetary Fund […]

Nationwide, all-cash deals change the game in real estate

A growing number of home buyers are bringing an unusual tactic to the negotiating table: an all-cash offer.

Cash purchases traditionally make up about a quarter of home sales, but they’ve soared to about 40 percent nationwide, according to the research firm CoreLogic.

And more of these buyers are individuals, not the institutional investors who plunged into the housing market when it collapsed, then pulled back when home prices rose.

Wealthy people, foreigners and retirees are transforming markets across the United States with these all-cash deals, helping make up for an alarming shortage of first-time buyers who are struggling to save for a down payment or qualify for a loan, a cause of grave concern about the long-term health of the market and its prospects for a true recovery.

“It’s the investor and the wealthy individual that’s keeping the market alive,” said Mark Zandi, chief economist at Moody’s Analytics. “The wealthy buyers in particular are fully engaged now. The stock market is up and times are good for them.”

Tatyana Baytler, a real estate agent at Lagert Real Estate in Rockville, Md., said foreign buyers tend to offer cash in part because they’re wealthy, but also because they have not lived in the country and built the credit history needed to secure a mortgage.

“Every fourth client I have now is an all-cash purchaser,” said Baytler, a Russian speaker. “I had a client from Russia in February who purchased a house in Washington, D.C., for $850,000 all cash. They want to leave [Russia] because of political unrest.”

John Denninger, a business owner in New York, didn’t want to plunk down that kind of cash when he bought a vacation home not far from West Palm Beach, Fla. But he didn’t want a mortgage, either, now that he has paid off the loan on his primary residence.

“I’ve invested wisely all my life and I have a pretty good job, so paying cash for a condominium didn’t seem like a stretch,” said Denninger, 55, who bought the condo three years ago for $70,000 and sank an additional $30,000 into upgrades. “I use it quite a bit now, and I never, ever rent it. I keep it to myself.”

The potential yield from rents is what attracted investors to the housing sector once the market hit bottom in late 2011. In areas where home prices plunged, investors began snapping up foreclosures and other deeply discounted properties, betting they could rent them for a tidy profit. The buying frenzy helped clear the excess supply of homes on the market and boost prices. It also frustrated first-time buyers who could not compete because their offers included financing contingencies, appraisals and inspections.

That still happens, said Richard Bridges, a real estate agent at ERA Blue Diamond Realty in Woodbridge, Va. Two weeks ago, Bridges listed a condominium in Woodbridge for a client. Four offers immediately rolled in, all at or above the $160,000 asking price. One was from an investor.

“My client took the cash offer, even though it was lower than the others, to ensure it would close quickly and without problems,” Bridges said.

But with prices on the rise and the foreclosure supply shrinking, investors are starting to retrench. Rental income does not necessarily go up when housing values rise. The largest institutional investors, some of whom bid on hundreds of homes a day, purchased about $400 million worth of homes a month in the first three months of the year, down from $520 million in the same period a year ago, according to a Morgan Stanley report.

Blackstone Group, which has invested $8.6 billion to buy 45,000 homes in the past two years, scaled back its purchases by about 70 percent since last summer, the company said in a statement. It now buys $30 million to $40 million worth of homes a week.

“Since the supply of distressed properties has thinned out, we expected the all-cash sales would be falling, but that’s not the case,” said Lawrence Yun, chief economist of the National Association of Realtors, which recently released a survey showing the share of investors has dropped from 24 percent in 2012 to 19 percent last year and the first quarter of this year. “It implies that there’s plenty of cash sloshing around.”

Yun says seniors who have a lot of equity in their homes are probably helping sustain the all-cash market. CoreLogic data show that the share of cash sales remains high among non-distressed properties, which are not popular among investors.

“It’s truly a national phenomenon,” said Sam Khater, CoreLogic’s deputy chief economist. “The share of cash sales is higher than normal in many parts of the country that never had a housing bust, like the rural heartland states of Oklahoma or Missouri.”

Fran Kormann, a real estate agent who specializes in selling homes at the Potomac Green senior community in Ashburn, Va., said every transaction she has handled recently has been a cash deal, perhaps because she is working with an older demographic than usual, buyers who are 65 or older and have accumulated more savings than clients in their 50s.

“I thought the all-cash deals would have stopped because the prices went up to $600,000, but they didn’t,” said Kormann, an agent with Keller Williams Realty. “I just sold a property to a lady in Boston who is coming here to be near her family. She’s paying all cash, and she’s keeping the home in Boston and renting it out.”

But all-cash deals do not necessarily mean all cash, even if they’re registered that way in the public record. Buyers sometimes tap into alternate forms of financing that count as cash, which is what Lori Pearce did to purchase a condominium in downtown Seattle.

Pearce, a retiree, already owns a more spacious condo nearby that she’s selling. She said she’s borrowing against her stock holdings to finance the purchase of the new condo, and she will pay off the loan with the proceeds of the sale from the old unit.

Since the start-up she joined went public in the mid-1990s, Pearce said she has never taken out a mortgage to finance a home, including a place in Hawaii where she spends part of the year.

Her real estate agent, Kirk Russell of John L. Scott Real Estate, said it’s rare that buyers have all the cash they need on hand. Instead, they leverage their assets to buy second homes for themselves or starter homes for their children, who may not have the credit scores or down payment needed to qualify for a loan.

“If you don’t have to get a loan, then don’t get one,” Pearce said. “But this must be incredibly hard for most buyers.”

[…]

Cash deals transform housing market

A growing number of homebuyers are bringing an unusual tactic to the negotiating table: an all-cash offer.

Cash purchases traditionally make up about a quarter of home sales, but they’ve soared to about 40 percent nationwide, according to the research firm CoreLogic.

And more of these buyers are individuals, not the institutional investors who plunged into the housing market when it collapsed, then pulled back when home prices rose.

Wealthy people, foreigners and retirees are transforming markets across the United States with these all-cash deals, helping make up for an alarming shortage of first-time buyers who are struggling to save for a down payment or qualify for a loan, a cause of grave concern about the long-term health of the market and its prospects for a true recovery.

“It’s the investor and the wealthy individual that’s keeping the market alive,” said Mark Zandi, chief economist at Moody’s Analytics. “The wealthy buyers in particular are fully engaged now. The stock market is up and times are good for them.”

Tatyana Baytler, a real estate agent at Lagert Real Estate in Rockville, Md., said foreign buyers tend to offer cash in part because they’re wealthy, but also because they have not lived in the country and built the credit history needed to secure a mortgage.

“Every fourth client I have now is an all-cash purchaser,” said Ms. Baytler, a Russian speaker. “I had a client from Russia in February who purchased a house in Washington, D.C., for $850,000 all cash. They want to leave [Russia] because of political unrest.”

John Denninger, a business owner in New York, didn’t want to plunk down that kind of cash when he bought a vacation home not far from West Palm Beach, Fla. But he didn’t want a mortgage, either, now that he has paid off the loan on his primary residence.

“I’ve invested wisely all my life and I have a pretty good job, so paying cash for a condominium didn’t seem like a stretch,” said Mr. Denninger, 55, who bought the condo three years ago for $70,000 and sank an additional $30,000 into upgrades. “I use it quite a bit now, and I never, ever rent it. I keep it to myself.”

The potential yield from rents is what attracted investors to the housing sector once the market hit bottom in late 2011. In areas where home prices plunged, investors began snapping up foreclosures and other deeply discounted properties, betting they could rent them for a tidy profit. The buying frenzy helped clear the excess supply of homes on the market and boost prices. It also frustrated first-time buyers who could not compete because their offers included financing contingencies, appraisals and inspections.

That still happens, said Richard Bridges, a real estate agent at ERA Blue Diamond Realty in Woodbridge, Va. Two weeks ago, Mr. Bridges listed a condominium in Woodbridge for a client. Four offers immediately rolled in, all at or above the $160,000 asking price. One was from an investor.

“My client took the cash offer, even though it was lower than the others, to ensure it would close quickly and without problems,” Mr. Bridges said.

But with prices on the rise and the foreclosure supply shrinking, investors are starting to retrench. Rental income does not necessarily go up when housing values rise. The largest institutional investors, some of whom bid on hundreds of homes a day, purchased about $400 million worth of homes a month in the first three months of the year, down from $520 million in the same period a year ago, according to a Morgan Stanley report.

Blackstone Group, which has invested $8.6 billion to buy 45,000 homes in the past two years, scaled back its purchases by about 70 percent since last summer, the company said in a statement. It now buys $30 million to $40 million worth of homes a week.

“It’s truly a national phenomenon,” said Sam Khater, CoreLogic’s deputy chief economist. “The share of cash sales is higher than normal in many parts of the country that never had a housing bust, like the rural heartland states of Oklahoma or Missouri.”

But all-cash deals do not necessarily mean all cash, even if they’re registered that way in the public record. Buyers sometimes tap into alternate forms of financing that count as cash, which is what Lori Pearce did to purchase a condominium in downtown Seattle.

Ms. Pearce, a retiree, already owns a more spacious condo nearby that she’s selling. She said she’s borrowing against her stock holdings to finance the purchase of the new condo, and she will pay off the loan with the proceeds of the sale from the old unit.

“If you don’t have to get a loan, then don’t get one,” Ms. Pearce said. “But this must be incredibly hard for most buyers.”

[…]

IMF board approves $17 billion for Ukraine

WASHINGTON (AP) — The International Monetary Fund board on Wednesday approved a two-year, $17 billion loan package for cash-strapped Ukraine as it seeks to regain stability following Russia’s annexation of Crimea.

The IMF assistance pledged in March was hinged on economic reforms in Ukraine, including raising taxes, freezing the minimum wage and raising energy prices — all steps that could hit households hard and strain the interim government’s tenuous hold on power.

“Urgent actions were necessary. Urgent decisions were taken by Ukraine and decisions now have just been taken by the IMF,” IMF Managing Director Christine Lagarde told reporters at the monetary fund’s headquarters.

Ukraine’s interim government finds itself caught between the demands of international creditors and a restive population that has endured decades of economic stagnation, corruption and mismanagement.

The IMF’s decision to approve the $17 billion loan paves the way for Ukraine to receive $15 billion in additional assistance pledged by the World Bank, the European Union, Canada, Japan and other European entities, and $1 billion in loan guarantees from the U.S. that Congress recently approved. As part of the deal, Ukraine will be required to use some of the $17 billion loan to repay money it already owes the monetary fund.

Ukraine, a nation of 46 million, is in turmoil after Russia annexed Crimea. Russian President Vladimir Putin has massed 40,000 troops on Russia’s border with Ukraine in what many fear is the first step to an invasion. Russia’s actions have created a standoff with the United States and many European nations.

“Today’s final approval for the $17 billion IMF program marks a crucial milestone for Ukraine,” Treasury Secretary Jacob Lew said in a statement. “The IMF program, in conjunction with bilateral assistance from the United States and other nations, will enable Ukraine to build on the progress already achieved to overcome deep-seated economic challenges and help the country return to a path of economic stability and growth.”

Lagarde said there were risks to the IMF loan but that Ukraine had demonstrated during the past few weeks that it can undertake reforms, such as ones addressing its exchange rate and the price of natural gas. “We believe that Ukraine has an opportunity to seize the moment,” she said.

Asked about recent sanctions that the U.S. and European Union have imposed on Russia, Lagarde said only that the IMF was not designing sanctions, but was trying to improve the situation in Ukraine so that stability can be restored.

“We very strongly encourage the parties to negotiate to come to terms, and whether it’s a question of the future price of gas, the payment of arrears — we very much hope the partners will find an agreement,” she said.

Politics & GovernmentBudget, Tax & EconomyUkraineChristine Lagarde […]

Congress to pass aid Ukraine, sanction Russia

WASHINGTON (AP) — Congress was near passage Tuesday of a bill to provide $1 billion in loan guarantees to cash-poor Ukraine and take punitive measures against Russia for its brazen annexation of part of the former Soviet satellite nation. Once passed by the House, it would be sent to President Barack Obama.

Russia’s incursion into Crimea has forged a deep rift between Moscow and Washington and the bill, which has bipartisan support, is a way for Congress to denounce Russia’s aggressive move and express support for Kiev.

If signed into law, the loan guarantees would help stabilize Ukraine’s economy. The bill authorizes $50 million to improve democratic governance and rule of law and fight corruption; support fair elections; and bolster civil society organizations.

The bill authorizes an additional $100 million to beef up security cooperation among the United States, European Union and countries in central and eastern Europe and further authorizes the president to provide defense help and additional security assistance to Ukraine and other countries in the region.

Targeting Russia, the bill would supplement sanctions the Obama administration has already taken by freezing assets and revoking visas of Russian officials and their associates who are complicit in or responsible for significant corruption in Ukraine. The measure also would sanction those who are responsible for human rights abuses against anti-government protesters and the undermining of the peace and sovereignty of Ukraine.

The U.S. has warned that further Russian incursions could result in broader penalties targeting the Russian economy, including its robust energy sector. But administration officials acknowledge that American sanctions wouldn’t have the same kind of bite as European penalties, given Europe’s deeper economic ties with Russia.

A separate bill expected to clear Congress would provide money to step up Voice of America and Radio Free Europe/Radio Liberty broadcasts to counter pro-Russian broadcasts in the area. Rep. Ed Royce, R-Calif., chairman of the House Foreign Affairs Committee, says Moscow is using propaganda to sow confusion and fear in the Ukraine.

Ukraine, a nation of 46 million people, has been struggling to regain stability since pro-Russia President Viktor Yanukovych was ousted in February. He was booted after months of protests sparked by his decision to back away from closer relations with the European Union and turn toward Russia.

Since then, Russia has moved thousands of troops to areas near the Ukrainian border, sparking fears in the U.S. and Europe that Putin could make a play for more territory.

In Kiev, Ukraine Prime Minister Arseniy Yatsenyuk has warned his country is on the brink of economic and financial bankruptcy. Ukraine’s Finance Ministry has said it needs $35 billion over the next two years to avoid default.

The International Monetary Fund last week pledged up to $18 billion in loans, hinged on structural reforms. The reforms demanded by the IMF, which include raising taxes, freezing the minimum wage and hiking energy prices, will hit households hard and are likely to strain the interim government’s tenuous hold on power. Other donors, including the European Union and Japan, have already pledged further aid to Ukraine. The total amount of international assistance will be about $27 billion over the next two years.

Steven Pifer, a former U.S. ambassador to Ukraine who is now an analyst at the Brookings Institution think tank in Washington, said the Ukrainian economy is in deep trouble, and every $1 billion will help.

The IMF program, which will total $14 billion to $18 billion over two years, will be distributed in tranches as Ukraine implements reforms, he said. The IMF board still needs to approve the money, so ‘‘the U.S. loan guarantees will help Kiev bridge the time from now until the IMF funding begins to flow,’’ Pifer said.

Ariel Cohen, an expert on Russian and Eurasian affairs at the Heritage Foundation in Washington, said the $1 billion the U.S. is providing in loan guarantees, coupled with the IMF and EU pledges, is a start to help Ukraine.

‘‘But it doesn’t resolve the problem, which is that Ukraine does not generate enough growth and income to plug the budgetary holes created by energy dependence on Russia,’’ Cohen said.

On Tuesday, Moscow sharply hiked the price for natural gas to Ukraine and threatened to reclaim billions in previous discounts, raising the heat on its cash-strapped government.

© Copyright 2014 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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Tycoons tap Norilsk cash for Olympic projects

MOSCOW (Reuters) – Two Russian tycoons will tap the prodigious cash flows of the country’s largest mining company to help complete their construction projects for next year’s Winter Olympics in Sochi, whose budget has spiralled to a record $50 billion (32.2 billion pounds).

Norilsk Nickel will put money into a ski resort and the Olympic (BSE: OLPCL.BOnews) village being built by its billionaire backers, Vladimir Potanin and Oleg Deripaska, in return for stakes in the two projects, three sources familiar with the matter said.

“As a result of a number of technical operations Norilsk would make a commitment to contribute as a Sochi co-investor,” a source at Interros, the firm that manages Potanin’s interests, told Reuters on Sunday.

The recent end of a dispute over strategy and control at Norilsk between Potanin and Deripaska, which ended in a rejig of the company’s ownership structure, appears to have eased the way to a deal in which the company would back the Olympic projects.

President Vladimir Putin has turned to some of Russia’s richest men to help give the sub-tropical Black Sea resort of Sochi and the nearby mountains in its Krasnaya Polyana section a makeover for the 2014 Winter Games.

But Potanin, architect of Russia’s 1990s privatisations in which he first acquired an interest in Norilsk, and Deripaska, main shareholder in aluminium major RUSAL, had balked at the spiralling costs of the event.

The duo put their signature to a recent letter requesting aid, also signed by state bank Sberbank (Other OTC: SBRCYnews) and state gas export monopoly Gazprom, that was met with silence from the government.

A spokesman for Deputy Prime Minister Dmitry Kozak, who is responsible for the Games, told Reuters on Sunday that officials were looking into some of the requests made in the letter, including for tax breaks and interest rate subsidies on loans.

At a board meeting on April 25, Norilsk agreed to exchange $196 million of debt, owed by a Potanin company, for a stake in the company building the Rosa Khutor resort where Alpine skiing events will be staged and an option to receive a two-hotel complex in the ski resort of Krasnaya Polyana in exchange for a stake.

Norilsk will also give a loan of $140 million to a company controlled by Deripaska, the loan can be repaid by a 19.6 percent stake in his Olympic village project and an option to acquire a part of a hotel there.

The deals will not have a significant financial impact on Norilsk, which produces 17 percent of the world’s nickel and posted core earnings of $4.9 billion last year. Norilsk shares have fallen by a third since reaching an all-time high in April 2011.

Sochi has long depended on Soviet-style workers’ holidays for its tourist income but, with affluent Russians preferring to spend their winter vacations in the Alps, there is little prospect of the ski resort turning a profit in the long run.

A source close to Norilsk said the acquisition would make it possible to offer annual holidays to its workers and their families. Over 70 percent of Norilsk’s 70,000 staff work for its Polar division, located north of the Arctic Circle, a harsh environment where the lack of sunlight can stunt the growth and development of children.

Interros, which has invested more than $2 billion in Rosa Khutor, declined to comment, as did Norilsk Nickel and Basic Element, which manages Deripaska’s assets.

(Reporting by Polina Devitt; Additional reporting by Thomas Grove; Editing by Douglas Busvine and Elaine Hardcastle)

[…]

Eurozone crisis: cash rationed in Cyprus to stop run on banks

Cyprus’s two biggest banks have rationed the amount of cash savers can withdraw every day as the authorities scramble to prevent the collapse of the country’s financial sector over the next 24 hours.

Savers at the Laiki bank and Bank of Cyprus will be hit by new cash limits of €100 a day on Monday following implementation of measures aimed at stopping a run on the country’s banks.

The future of the Bank of Cyprus, the island’s largest financial institution, has been called into doubt following emergency talks between the eurozone and the International Monetary Fund on Sunday night.

Under plans drawn up by the eurozone and IMF, depositors with over €100,000 in the bank face losses of between 20pc to 40pc, or even higher, of their money, raising questions over its viability and fears of a run on all Cypriot banks

Cypriots queue to take money out following the news that deposits will be taxed.

The IMF and Germany have also demanded that the Bank of Cyprus take on over €9 billion in liabilities owed to the European Central Bank by Laiki, or Popular Bank, another bank forced into receivership by the eurozone last week.

During emergency negotiations in Brussels last night, Cyprus was warned that it faced disorderly default and exit from the EU single currency on Tuesday unless it bowed to the demands, potentially devastating the island’s economy.

Nicos Anastasiades, the Cypriot president, said that he was struggling to keep his country in the euro and to “avert a disorderly default if there is no final agreement on a loan accord.”

The newly-elected President Anastasiades warned the eurozone that its demands could force him to walk out of the talks and resign just weeks after taking office, accordomg to the state news agency.

“I send you one proposal, you don’t accept it. I send you another, the same thing. What else can I do? Do you want to force me to resign? If that’s what you want, tell me,” he told Christine Lagarde, the IMF chief, according to the Cyprus News Agency.

Wolfgang Schaeuble, the German finance minister, dismissed the Cypriot threat to walk out. “I’m known for not giving in to blackmail, by nobody and nothing,” he said.

Negotiations to secure a €10bn (£8.5bn) to save Cyprus from bankruptcy were plunged into chaos last week when the Cypriot parliament rejected a plan to raid all bank depositors, including those with insured savings under €100,000.

Demonstrator Gristakis Georgiou, an employee for Cyprus Popular Bank Pcl, center, reacts during a protest outside the parliament in Nicosia, Cyprus. (Bloomberg)

Last Thursday, the ECB warned Cyprus that it would tirigger economic collapse by cutting off “emergency liquidity assistance” to Cypriot banks on Tuesday unless the tiny island nation agreed to eurozone demands for restructuring and losses for deposits over €100,000.

“The framework for the assistance programme will not change and the European Central Bank cannot guarantee its relief assistance until after Monday. Cyprus has a hard road to go either way,” said Mr Schaeuble. “The numbers have not changed, if anything they have worsened.”

The island’s second biggest bank, the Popular Bank, or Laiki in Greek, has already been forced to wind down under draconian bank resolution laws drawn up by the eurozone and agreed by Cypriot MPs on Friday.

Cypriots fear that if the Bank of Cyprus is pushed to the same fate then the shock to the economy, combined with the draconian restrictions on capital in modern times, will be fatal.

“Cyprus’s choices are between a bad scenario and a very bad scenario. A big part of the problem is making what the IMF and Germany want seem less bad than disorderly default,” said an EU official during talks last night.

The eurozone has told Cyprus that it must cut the size of its financial sector by more than half, reducing it from eight times to 3.5 times the size of the island’s annual GDP by 2018.

Pierre Moscovici, the French finance minister, accused Cyprus of bringing the crisis on itself by allowing banks to balloon in size fuelled by Russian investments, estimated at €20 billion.

“To all those who say that we are strangling an entire people, Cyprus is a casino economy that was on the brink of bankruptcy,” he said.

Mr Moscovici, echoing previous comments by Germany, insisted that the eurozone was not concerned about the impact of confiscating bank deposits in Cyprus, or of closing banks.

“I am not worried at all about the risk of contagion because the economy of Cyprus, the banking sector of Cyprus, always is very specific,” he said.

Emergency legislation agreed at the weekend gives Cyprus the power to restrict all banking transactions, including cash withdrawals and the use of credit cards, alongside “any other measure necessary for reasons of public order and safety”.

[…]

Cyprus limits bank withdrawls to €100 a day as island’s leaders hold emergency talks

The central bank in Cyprus imposed a €100 a day withdrawal limit at cash machines for all local banks on Sunday to avert a run on lenders, as the island’s leaders meet its international lenders for last-ditch talks to avert a financial meltdown.

A spokesman for second largest lender Cyprus Popular Bank, which had previously limited withdrawals to €260, said the new measure began at 1pm local time and would remain in place until the bank reopens, which is scheduled for Tuesday, or until confirmation of continued emergency funding from the European Central Bank.

A government official, who declined to be named, told Reuters that the measure applied to all local banks on the island.

There were dramatic scenes on Thursday night as Cypriots queued to withdraw cash from the Laiki bank, the country’s second largest, after the European Central Bank warned it would cut off funds on Monday unless there was agreement on an international bailout.

Cypriots queue to take money out following the news that deposits will be taxed.

To prevent the bank’s collapse a cash limit of €260 a day was imposed as panic was fuelled by angry demonstrations by Laiki staff – the restructuring means 10,000 jobs are at risk – outside the Cypriot parliament.

This limit has now been cut further to €100 withdrawal a day across all local banks on the island.

Cypriot President Nicos Anastasiades and other ministers arrived in Brussels today for meetings with senior EU leaders, including Herman Van Rompuy, the European Council president, and Christine Lagarde, the IMF’s managing director for emergency talks over a deal under which deposits of more than 100,000 euros in the Bank of Cyprus will be hit by a 20 per cent levy.

Deposits of more than 100,000 euros in other banks will be targeted by a four per cent forced levy.

Cyprus’s leaders are expected to submit to the drastic plan – which critics call daylight robbery – in return for a €10bn (£8.5bn) bail-out loan to save the country from bankruptcy.

Demonstrator Gristakis Georgiou, an employee for Cyprus Popular Bank Pcl, center, reacts during a protest outside the parliament in Nicosia, Cyprus. (Bloomberg)

The eurozone and IMF are pushing Cyprus to hammer its largest bank as part of radical measures to raise up to €7bn as part of its bail-out deal or face going bust on Tuesday.

The country’s second biggest bank, the Popular Bank, or Laiki in Greek, has already been forced to wind down under draconian bank resolution laws drawn up by the eurozone and agreed by Cypriot MPs on Friday.

The Bank of Cyprus must also absorb assets from Laiki and the eurozone is demanding that it take on the failed bank’s ECB liquidity debts, which could add up to €9.1bn.

In total Cypriot bank assets total €68bn, with deposits of more than €100,000 totalling €38bn. The Bank of Cyprus has over a third of bank deposits.

The 20 per cent rate on high-value accounts at the Bank of Cyprus is likely to trigger political conflict on the island, which has seen widespread protests in the last week. It is expected to particularly hit Russian investors, who make up the bulk of the Cypriot financial sector’s high-value clients.

Economic life in Cyprus has all but ground to a halt in the last few days, as the closure of the banks has turned the country into cash-only economy.

Town centres are all but deserted, and retailers, facing cash-on-delivery demands from suppliers, have warned that stocks are running low.

[…]