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Russia: Media-MOST And Gazprom Reach Agreement

Moscow, 17 Nov 2000 (RFE/RL) -- Russian state-controlled gas monopoly Gazprom and the country's leading private media company Media-MOST have reached agreement on settling Media-MOST's outstanding debts.

Alfred Kokh, head of the gas company's media division, announced the agreement today in Moscow. He says as a result, Gazprom will increase its share in the television network NTV to 46 percent from 30 percent. Kokh says:

"So when you add up the 30 percent already owned by Gazprom, we receive through this agreement 46 percent of NTV as our property."

NTV is one of the most popular television stations in the country and is regarded as the jewel in Media-MOST's crown. Gazprom has been a shareholder in Media-MOST since 1996 and in the past has acted as guarantor to several loans made to the company.

The agreement follows months of difficult negotiations between the two companies. Media-MOST is headed by financier Vladimir Gusinsky, who in the past has accused Gazprom of trying to further the government's aim of trying to gain control over private media. Gusinsky is currently out of the country and is said to be somewhere in Europe.

Gazprom also received an additional 19 percent share of NTV for its guarantee of a $260 million loan to Media-MOST by a foreign bank, Credit Suisse-First Boston.

Kokh says the parties agreed to keep this 19 percent stake separate and increase it to 25 percent plus one share, which would confer significant rights on any new shareholder. The stake would then be offered to foreign investors.

The agreement also provides for the transfer to Gazprom of 25 percent plus one share in other Media-MOST companies and another 25 percent as a guarantee. Media-MOST controls several popular publications, but it's not clear what involved in the deal.

Today's agreement coincided with more legal trouble for Gusinsky. Russian prosecutors today resurrected fraud charges against Gusinsky for which he spent three days in jail in June. The charges were dropped earlier. Also this week, Gusinsky was charged separately with embezzlement in relation to his business dealings with Gazprom.

These embezzlement charges resulted in the cancelling of an earlier agreement between Gazprom and Media-MOST a week ago.

Gazprom officials say they backed out of that deal because they say Gusinsky couldn't be trusted to implement the agreement.

But Kokh says this time, the agreement was signed with Media-MOST -- not with Gusinsky.

"Cancelling the earlier agreement was a kind of 'time-out' in order to analyze the situation and understand how to move along further. We took this time-out and, together with Media Most, found what is a good solution in my opinion -- an ordinary agreement where the party is not Mr. Gusinsky but Media Most."

Much of the deal's fine print is still not known, but Kokh says most provisions will have to be fulfilled by 20 December.