RUSSIA: AUCTIONING OFF OF THE CORE UNIT OF RUSSIA'S BIGGEST OIL PRODUCER YUKOS SET TO BEGIN
Record ID:
344816
RUSSIA: AUCTIONING OFF OF THE CORE UNIT OF RUSSIA'S BIGGEST OIL PRODUCER YUKOS SET TO BEGIN
- Title: RUSSIA: AUCTIONING OFF OF THE CORE UNIT OF RUSSIA'S BIGGEST OIL PRODUCER YUKOS SET TO BEGIN
- Date: 20th December 2004
- Summary: (W5) SHOWS: MOSCOW, RUSSIA (DECEMBER 19, 2004) (REUTERS) 1. SLV EXTERIOR OF RUSSIAN PROPERTY FUND; SLV PEOPLE ARRIVING FOR AUCTION; MV POLICEMAN CHECKING ID'S; MAN ENTERING PROPERTY FUND BUILDING; WIDE OF PRESS AND PUBLIC ROOM WITH LARGE SCREENS (6 SHOTS) 0.51 (W4) MOSCOW, RUSSIA (DECEMBER 19, 2004) (REUTERS) 2. WIDE OF MENATEP GROUP LAWYERS NEWS CONFERENCE 1.11 3. (SOUNDBITE) (English) SANFORD SAUNDERS, MENATEP GROUP LAWYER, SAYING "Menatep intends to take every actions available in order to protect its interest in YUKOS. We have come here today, we have requested to the property fund for admission to the auction on behalf of group Menatep so we will see after the news conference whether we will be allowed in." 1.34 4. SCU JOURNALISTS 1.40 5. (SOUNDBITE) (English) SANFORD SAUNDERS, MENATEP GROUP LAWYER, SAYING: "There is no reason for this auction to go forward except to accelerate the government plan to destroy YUKOS and expropriate its assets. If we will be allowed into the property fund we will watch and observe who participates whether the parties are compliant with the court order in Houston. We will see the people who we will see in courts in the near future." 2.12 6. SCU STILL PHOTOGRAPHS OF FORME YUKOS CEO MIKHAIL KHODORKOVSKY 2.18 7. MV NEWS CONFERENCE 2.24 8. LAS TILT DOWN EXTERIOR OF YUKOS BUILDING IN MOSCOW 2.51 Initials Script is copyright Reuters Limited. All rights reserved
- Embargoed: 4th January 2005 12:00
- Keywords:
- Location: MOSCOW, RUSSIA
- Country: Russia
- Reuters ID: LVA1M3Y4RRV6U7H9OQGZ77RM3P39
- Story Text: Russia was set to rip the heart out of its biggest
oil producer, YUKOS, with the auctioning off of its core unit.
Russia was set to rip the heart out of its biggest
oil producer YUKOS on Sunday (December 19), grabbing the
firm's core unit in a forced auction after almost a decade
in private hands.
The sale of Yuganskneftegaz, which pumps more oil than
OPEC member Qatar, started at 4 pm (1300 GMT) in defiance
of a U.S. legal order and in pursuit of tax claims which
have left YUKOS with a back-tax bill of $27.5 billion U.S.
dollars.
Leading prospective buyer Gazprom was expected to go
ahead and bid despite a further U.S. bankruptcy court
ruling that has ordered the state-controlled gas monopoly
and its foreign bankers not to take part in Sunday's
auction.
YUKOS is widely seen by analysts as the victim of a
Kremlin campaign to crush its politically ambitious owner,
Mikhail Khodorkovsky, and seize control of strategic
sectors of the economy sold off in the chaotic
privatisations of the 1990s.
The U.S. bankruptcy court's initial order on Thursday
to temporarily block the sale, in response to YUKOS filing
for Chapter 11 bankruptcy protection, was upheld in a
second ruling on Saturday.
And only hours before the auction lawyers for Menatep,
a group through which Khodorkovsky and his associates
control YUKOS, pledged to extend the fight to other
countries.
The lawyers told a news conference in Moscow they would
retaliate by trying to seek injunctions in foreign courts
impounding Russian oil and gas exports.
"Menatep intends to take every action available in order to
protect its interest in YUKOS. We intend to take
legal action in multiple jurisdictions," Sanford Saunders
told a news conference.
He said the group also intended to file petitions
throughout Western Europe and beyond, including requests to
seize Russian oil and gas exports.
"There is no reason for this auction to go forward
except to accelerate the government plan to destroy YUKOS
and expropriate its assets. If we will be allowed into the
property fund we will watch and observe who participates
whether the parties are compliant with the court order in
Houston. We will see the people who we will see in courts
in the near future," Sanders added.
YUKOS's troubles have already helped push oil prices to
peak levels over the past few months and concerns over
supplies from the world's second-biggest oil exporter could
grow after Sunday's threat of legal action from Menatep's
lawyers.
Khodorkovsky is now on trial for fraud and tax evasion
and faces 10 years in jail if convicted.
And the minimum auction price of $8.65 billion for
Yugansk leaves his company vulnerable to the Russian
authorities requiring further asset sales to meet its full
tax bill.
YUKOS has said selling Yugansk at the minimum price
would destroy shareholder value, citing an appraisal by
investment bank Dresdner Kleinwort Wasserstein which put
the value at $14-$17 billion.
The assault on YUKOS has also shaken investment
confidence in President Vladimir Putin's Russia, where the
economy is showing signs of slowing despite high oil
prices.
Russia's antitrust watchdog said it had registered four
bidders for the Yugansk auction.
The U.S. bankruptcy action appeared to have sunk plans
for the already heavily-indebted Gazprom to get funding for
its bid from a consortium including Deutsche Bank and JP
Morgan.
But analysts say Gazprom might obtain financing from
state bank Sberbank or even the Central Bank.
The world's largest natural gas firm is at the centre
of plans to create a huge state energy holding company but
the fact it supplies a quarter of Europe's gas makes it
vulnerable to international court rulings.
Other oil firms keen to avoid YUKOS's fate have toed
the Kremlin line, abandoning tax "optimisation" schemes
while manoeuvring to carve up YUKOS's lucrative export
quotas.
The auction could see reclusive Surgutneftegaz
guarantee a quorum of two independent bidders or contribute
part of its estimated $8 billion cash pile to back
Gazprom's bid.
Meanwhile Roman Abramovich, the main owner of YUKOS's
estranged merger partner Sibneft obtained a court order
last week barring YUKOS from holding a planned shareholders
meeting on Monday. The meeting was to have voted on whether
to liquidate the company.
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