Government sources said details of the package, which is seen as a key test of Russia’s financial credibility, will be unveiled today. The package aims to reduce the cost of servicing Russia’s debt burden by swapping the high-yielding short-term debt for longer term paper.The Russians were forced to withdraw earlier proposals last week under pressure from foreign investors who claimed that the proposals would be discriminatory.Commentators said the Russians had to establish some degree of debt seniority so that the foreign investors involved could know where they stood.The crisis, which deepened after the shock decision by President Yeltsin to sack the Prime Minister, Mr Sergei Kiriyenko, and his entire cabinet on Sunday night continued to weigh heavily on the Russian market.The rouble slid further to 7.14 to the dollar from 7.0050 on Friday.Shares, however, were up; the Moscow Times Index showed a gain of 2.29 points to 58.14.Analysts said foreign investors hoped that the return of 60-year-old Mr Chernomyrdin, only four months after he was fired to make way for Mr Kiriyenko, would give some solidity to the government and make it easier to push through vitally-needed economic and financial reforms.Although hostile to the measures proposed by pro-Western reforms for liberalising the economy, Mr Chernomyrdin, a former head of the giant Gazprom gas group, was one of the few politicians able to command the support of the Duma (the Russian parliament), which has dragged its feet over reform.However, a definitive assessment of the new government’s economic credentials will have to wait until the other members of the new cabinet are announced. However, it is understood that the package, which had been delayed because of President Yeltsin’s decision on Sunday night to fire the government, goes a long way toward meeting the concerns of the foreign banks.
The deal affects short-term Russian treasury bills, known as GKOs and OFZs, and some margin calls on futures contracts guaranteed by the Russian foreign exchange market. THE NEW Russian Prime Minister, Viktor Chernomyrdin, gave the green light last night to a plan to restructure $40bn of government short- term debt and put the country back on a firmer financial footing. Headhunters are targetting Goldman Sachs staff in an attempt to exploit the uncertainty about who will benefit most from the flotation.Sources inside the bank say that headhunters are trying to prise staff away by playing on fears that they have lost out in the share allocation due to be announced within the next few weeks.”They have been telephoning staff and saying they’ve heard that they haven’t done as well as so-and-so, and would they like to move?” said one insider.Staff have been deliberately kept in the dark about the float.. Asset management, where Goldman wants to expand, accounted for $1.3bn of revenues in the first half while investment banking accounted for $1.59bn.In the year ended November 1997, Goldman made net revenue of $7.5bn, 39 per cent of which was earned from proprietary trading.According to the filing, Goldman intends to use float to bolster its pre-eminent market position by expanding profitable areas like asset management and building up its expertise.The filing contains no details about the existing ownership structure or how the shares will be shared out between staff. The firm will begin marketing for the listing in October and come to the market in New York in November.
According to figures disclosed in the document Goldman proprietary trading accounted for $2.58bn, or 47 per cent of the firm’s $5.46bn net revenue in the first six months of the year.That appears to be a far higher percentage than its closest Wall Street rivals, suggesting the firm is more vulnerable to a sharp market downturn than its competitors.Morgan Stanley Dean Witter made $2.17bn, or around 30 per cent of its profits from own book trading.

US volumes have been recovering after the de-stocking by retailers earlier in the year.In retailing, UK pub profits have been hit by the poor summer weather. WALL STREET investment bank Goldman Sachs last night filed formal registration papers with the Securities and Exchange Commission, effectively setting in motion its long-awaited $30bn flotation. In addition to the new charges there will be a pounds 36m deficit arising from a previously announced debenture redemption premium.
News of the costs over-shadowed a trading statement which the company claimed showed it was still on track despite the strong pound, the Asian crises and the effects of the poor British summer.Trading in the 11 months to 31 July has been “broadly as expected, the company said.” The key spirits and wine division is on track for modest growth in the second half except in Asia where the principal impact has been on the duty free business.Ballantine’s whisky has grown volumes in most European markets while Beefeater gin has grown strongly in Spain. In the Dunkin’ Donuts and Baskin-Robbins franchise business, international operations have been hit by the turmoil in Asia though sales are strong in America.Allied Domecq shares closed 2p lower at 538p.. The company said currency fluctuations will knock pounds 30m off profits in the full year, in line with the pounds 20m effect in the first half. But Allied revealed a host of additional exceptional charges including a pounds 45m deficit arising from a five-yearly valuation of the pub estate; a pounds 30m loss from the revaluation of short leasehold pubs and pounds 40m of other losses including losses of the disposal of Gleneagles Spring water and a pounds 20m goodwill write off on the proposed merger of its Victoria Wine off-licence chain with Whitbread’s Threshers’ division.

I think I have convinced them of that and they no longer see me as the mad axeman.”. ALLIED DOMECQ, the spirits group which includes Teacher’s whisky and Beefeater gin, revealed yesterday that its full year profits will be hit by higher than expected exceptional charges and currency costs totalling pounds 181m. It was hardly their fault that the greenhouses, heated from the central system, were at the mercy of bureaucrats who decided that if it was May, then it must be warm – and switched off the heating. Soon the glasshouses will have their own heating system for tropical plants that like extra warmth, even in August.Neither could the Russians be blamed for lack of money to buy pots and compost, which Harvey brought in from Holland. But he believes he has perhaps taught them one thing.”They were horrified when they first saw me, a young Englishman who spoke barely a word of Russian, wielding secateurs and cutting at everything in sight They were very reluctant to cut They thought the plants should be left to their own devices But pruning is the key to good gardening. Improved living conditions, for some at least, mean there is now more interest in decorative plants and flowers.Russian television wrongly reported that Harvey was employing homeless people in his garden.

Instead, he works with about a dozen poorly- paid university staff.Russian botanists with years of experience earn about $200 (pounds 125) a month while their counterparts at Kew would expect to be on pounds 15,000 to pounds 18,000 a year.The Russian botanists, experts in their own right, have struggled with the absurdities of the Soviet system. “Sadly, much as I am in favour of community gardening, I don’t have the funds for that,” he said. Certainly many poor Russians would love to come and work for him. Babushki (grandmothers), who previously had nowhere to sit except in their back yards, can relax on benches among the petunias while children have been given sandpits to compensate them for the fact that football is no longer encouraged.A firm of Russian developers called MCD is financing the project to restore the garden, in part using the original layout plans. I could put my hands inside the cracks.”The economic situation was also a factor. When food was hard to come by in the shops, Russians grew their own fruit and vegetables in what Harvey called “fantastically productive dacha gardens”.