RUSSIA: RUSSIAN AUTHORITIES' PLAN TO SELL PART OF OIL GIANT YUKOS FEULING NEW UNCERTAINTY IN THE MARKETS
Record ID:
344964
RUSSIA: RUSSIAN AUTHORITIES' PLAN TO SELL PART OF OIL GIANT YUKOS FEULING NEW UNCERTAINTY IN THE MARKETS
- Title: RUSSIA: RUSSIAN AUTHORITIES' PLAN TO SELL PART OF OIL GIANT YUKOS FEULING NEW UNCERTAINTY IN THE MARKETS
- Date: 13th October 2004
- Summary: (U4) NEFTEYUGANSK, SIBERIA, RUSSIA (FILE - JULY 26-27, 2004) (REUTERS) 1. SLV/SV OF YUKOS' MAIN OPERATING UNIT, YUGANSKNEFTEGAZ/ OIL PUMPS IN OPERATION (3 SHOTS) 0.21 2. SV EMPLOYEE AT YUGANSKNEFTEGAZ OPERATING VALVE AT OIL PUMPING SITE (2 SHOTS) 0.36 3. LV OF PART OF YUKOS FACILITY SITE (2 SHOTS) 0.49 (U4) MOSCOW, RUSSIA (OCTOBER 13, 2004) (REUTERS) 4. SLV OF SHARE TRADING FLOOR AT RUSSIA'S ALFA BANK 0.54 5. SV VARIOUS OF TRADERS AT DESK/ SCREENS (4 SHOTS) 1.16 6. MCU (English) OLEG MARTYNENKO, HEAD OF ALFA BANK SHARE SALES TO RUSSIAN PORTFOLIO CLIENTS SAYING: "I think the uncertainty is the key word in the markets right now. The market started to get used to positive news flow; there was positive news on other companies, on Gazprom, on Lukoil and it was looking like there was an up trend, and all of a sudden the uncertainty in YUKOS comes again, and a lot os speculators and shorter term investors started to sell their positions, not only in YUKOS, but in other blue chips as well. And nobody actually knows what will happen to Yugansk at the moment and nobody exactly knows what is the valuation of the company and how they will proceed. On the basis of that information you would like to increase the amount of cash on your portfolios and that is what people are doing at the moment." 2.03 (U4) GRAPHICS (OCTOBER 13, 2004) (REUTERS) 7. CU YUKOS SHARE PRICE 2.11 (U4) MOSCOW, RUSSIA (OCTOBER 13, 2004) (REUTERS) 8. SLV EXTERIOR OF YUKOS HEADQUARTERS 2.17 9. LV/SLV OF PEOPLE ENTERING AND LEAVE YUKOS BUILDING (2 SHOTS) 2.32 10. CLOSE-UP OF YUKOS SIGN 2.38 Initials Script is copyright Reuters Limited. All rights reserved
- Embargoed: 28th October 2004 13:00
- Keywords:
- Location: MOSCOW AND NEFTAYUGANSK, SIBERIA, RUSSIA
- Country: Russia
- Reuters ID: LVAANLNKVJW9LL6MVGF9U8OURL7M
- Story Text: Russian authorities's plan to sell part of oil giant
YUKOS feuling new uncertainty in the markets.
A plan by the Russian authorities to sell a key part
of the oil giant YUKOS will bring new uncertainty to the
investment climate in the country.
YUKOS shares dropped on the news of the announcement on
fears the assets would be sold for much less than expected.
"I think the uncertainty is the key word in the markets
right now. The market started to get used to positive news
flow; there was positive news on other companies, on
Gazprom, on Lukoil and it was looking like there was an up
trend, and all of a sudden the uncertainty in YUKOS comes
again, and a lot os speculators and shorter term investors
started to sell their positions, not only in YUKOS, but in
other blue chips as well.
"And nobody actually knows what will happen to Yugansk
at the moment and nobody exactly knows what is the
valuation of the company and how they will proceed. On the
basis of that information you would like to increase the
amount of cash on your portfolios and that is what people
are doing at the moment," said Oleg Martynenko, head of
share sales to portfolio clients at Russia's Alfa bank, on
Wednesday (October 13).
Russia's government said on Tuesday (October 12) it
would sell part of YUKOS's main Siberian unit Yugansk.
The Yugansk production unit was valued at as little as
$10.4 billion U.S. dollars under the most pessimistic
scenario, according to a report for the government by
investment bank Dresdner Kleinwort Wasserstein, sources
told Reuters.
Analysts said the sale would be value-destructive for
the country's top oil exporter and would raise further
concerns over the investment climate in Russia.
"Since the valuation of Yugansk has been completed but
the paying off of the (tax) debts (by YUKOS) is dragging on
without justification, a decision ... has been taken to
sell part of the property of YUKOS via the Russian Property
Fund," the Justice Ministry statement said.
It gave no other details, but domestic news agencies
quoted officials as saying the ministry had decided to sell
some assets of Yugansk or YUKOS' stake in the unit to
recover billions of dollars in tax arrears.
The property fund said the sale could take place by the
end of November.
Dresdner Kleinwort Wasserstein valued Yugansk's equity
value at $15.7 billion to $18.3 billion, as analysts
expected, but the document also included a valuation of
$10.4 billion that the investment bank considered overly
conservative, according to a source familiar with the
valuation.
YUKOS' tax problems are part of a broader campaign seen
by many analysts as orchestrated by the Kremlin to punish
YUKOS' founder Mikhail Khodorkovsky for political
activities. He is now on trial on charges of fraud and tax
evasion.
Tax officials claim YUKOS owes $3.4 billion for 2000 and
$4.0 billion for 2001, while Yugansk also owes $950 million
for 2002. This takes the total bill to $8.35 billion, of
which YUKOS has already paid around $3 billion.
Market players have speculated tax officials would push
YUKOS' back tax bills as close as possible to the valuation
of Yugansk, so the unit can be easily transferred to state
energy firms, such as gas monopoly Gazprom.
Local news agencies quoted a senior Justice Ministry
official, Alexander Buksman, as saying a minority stake of
YUKOS in Yugansk, which produces 1 million barrels per day,
would not help cover the bill.
"The valuer (Dresdner) has applied a 60 percent
discount (to the price of Yugansk) given high risks for
potential buyer," Buksman was quoted as saying. He did not
specify whether the $10.4 billion figure excluded or
included the discount.
Dresdner and YUKOS declined to comment.
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