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Today in Russian Business – April 3, 2009

Russia’s economy shrunk by 7% in the first quarter, states Deputy Economic Development Minister, Andrei Klepach, the figures being ‘worse than we expected’.  Freight shipments are likely to decrease by 22% in April after Russian Railways reported shrinkage of more than 25% between January and March 2009.  Alexander Lebedev’s Blue Wings airline has reportedly had its license removed due to financial insolvency.  Alfa Bank and Basic Element are wrangling again over credit issues; the Bank says that BasEl is not cooperating in attempts to restructure its $800 million debt, reports the Moscow Times.  According to Bloomberg, Alfa Bank has said it will offer the Russian government up to 49% to secure capital from the state. VTB Group plans to diversify its financial concerns through buying up debt-addled companies’ accounts across Russia.  Oleg Deripaska’s GAZ is negotiating with a foreign partner on a joint car-manufacturing project in Russia.  In the face of declining demand, Ford is proposing to cut the working week to four days at its Russian assembly plant.