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The Bank of Moscow Mixes a Cocktail
The City of Moscow has approved the merger of the KiN wine and cognac plant, Moscow Interrepublican Wine Plant and Kornet champagne plant through the transfer of shares in those companies to the newly founded United Company holding. The resolution is the first official confirmation that the Bank of Moscow, which initiated the deal, owns Kornet and Interrepublican Wines. A major new wine and cognac producer will thus appear on the Russian market by the end of the year. United Company will also receive 25.01 percent of the Interrepublican sales arm, Interrepublican Trading House.
Among Interrpublican’s holdings are the Jenssen cognac producer in France, wine producers in Moldova and Bulgaria and the Flagmen and Bastion brands. It is the producer of Arbatskoe wine. It produced 1.54 decaliters of alcoholic products in 2006, had gross receipts of 1.2 billion rubles and net profits of 24 million rubles. Kornet produces Zolotoe and Nadezhda champagnes, among other. It produced 1.12 million decaliters that year, with 707 million rubles in gross receipts and 93 million rubles in net profit. KiN, maker of Moskovsky and Stary Gorod cognacs, produced 1.13 million decaliters and had gross receipts of 1.82 billion rubles and net profit of 59 million rubles.
The city resolution gives an assessment of the value of the new company based on the assets that make it up. The city’s 43.07-percent share of KiN is said to be worth 338.3 million rubles, its 15.2 percent of Kornet 341.6 million rubles and 25.01 percent of Interrepublican 670.26 million rubles, for a total of 1.353 billion rubles. An analyst for a Western bank commented that Interrepublican has a suspiciously high estimate, and KiN a suspiciously low estimate. The estimators for KiN and Interrepublican, the Institute of Corporate Development and Department of Professional Assessment, respectively, noted that KiN has a problem with the rental of the lot its plant is located on. The rental agreement is valid for 11 months (compared to Interrepublican’s for 49 years). Furhtermore, KiN’s main brand, Moskovsky is licensed from Soyuzplodoimport, which could undermine its business by reassigning the brand. The Business Analytica agency estimates that the new company will control 24 percent of the Russian market for brandy, 10 percent of the champagne market and 8 percent of the wine market.
www.kommersant.com
All the Article in Russian as of May 30, 2008
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Photo: Àíäðåé Ìàõîíèí
