Yukos in trouble
Wednesday, July 26, 2006, 12:12
On April 15 2003, Russian president Vladimir Putin sent a letter to the Yukos oil company congratulating it on its 10th anniversary and praising its "professionalism" and "efficiency". "Yukos is confidently moving along the trajectory of stable growth. I wish further success in realising your plans and new promising projects." On the same day, Mikhail Khodorkovsky, the principal owner of Yukos, announced he would step down in 2007 as chief executive of the company and dedicate himself to other activities, which many understood would be politics. Six months later Khodorkovsky was arrested and charged with tax evasion and fraud.
OAO Yukos Oil Co., which is facing liquidation, said it won't sell any of its assets until a Moscow court rules next week on whether to declare it bankrupt. „It would be inappropriate and without benefit to the company for any last-minute deals,” Claire Davidson, a Yukos spokeswoman, said in a statement today. OAO Gazprom, the state-run natural-gas monopoly, yesterday expressed interest in acquiring Yukos's 20% stake in its oil unit OAO Gazprom Neft and other unspecified assets, Davidson said by phone from London. Earlier today, the newspaper Vedomosti reported Gazprom was interested in buying Yukos units Arcticgas and the Angara petrochemical plant, as well as the company's 49% stake in Transpetrol AS, Slovakia's oil pipeline operator. Yukos creditors yesterday voted to recommend selling the company's assets after Eduard Rebgun, its external manager, said the company can't be salvaged. A Moscow judge will decide on Aug. 1 whether to declare the company bankrupt.
Yesterday, Yukos creditors voted to liquidate what was once Russia's biggest oil producer in a decision an owner said sealed the government's destruction of the company. Creditors, led by federal tax authorities and state-run oil company OAO Rosneft, recommended selling Yukos's assets after external manager Eduard Rebgun said the company can't be salvaged. The creditors rejected a management recovery plan that valued Yukos assets at about $38 billion, compared with a valuation of $17.7 billion done by Rebgun. "I don't consider financial recovery to be possible" Rebgun told the creditors in a meeting hall in Yukos's Moscow headquarters. A Moscow judge is to decide the company's fate on Aug. 1. „This decision is absurd. Yukos is solvent, can pay its creditors and be restructured in order to survive,” Tim Osborne, a director of GM Ltd., the company formerly known as Menatep and Yukos's main owner, said in a statement. „The decision is simply the final step in the Russian government's campaign to destroy Yukos.” In the 2 1/2 years since Mikhail Khodorkovsky, the Yukos chief executive officer, was arrested on fraud charges, President Vladimir Putin's government has used assets from Yukos to help turn Rosneft and Gazprom into challengers to BP Plc and Royal Dutch Shell Plc. Rosneft and Gazprom have given Putin, control of 60% of Russia's - the world's biggest - energy industry.
Yukos shares plunged 27% to 15.85 rubles on the Micex exchange in Moscow, the lowest close since Aug. 31. Yukos CEO Steven Theede resigned July 19, ending a two-year battle with the Russian government to save the oil company. Theede quit after being told that Rebgun would recommend liquidating Yukos. His resignation takes effect Aug. 1. On the same day, the Moscow Arbitration Court is set to review the creditors' recommendations. Besides choosing to liquidate the company, the creditors voted to recommend a seven-member creditors' committee consisting of four representatives of the Federal Tax Service, two representatives of Rosneft and one representative of Yukos unit OAO Samaraneftegaz. The creditors also recommended keeping Rebgun as the company's receiver at a monthly fee of 8.6 million Russian rubles ($320,000). „It's the end of one battle and the beginning of the next one,” said Peter Westin, chief economist at MDM Bank in Moscow. „The remaining Yukos assets are still very valuable.” Yukos said in a statement after the meeting that Gazprom is interested in acquiring Yukos's 20% stake in Gazprom Neft, formerly known as Sibneft, as well as other assets. (Bloomberg, Financial Times)