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The Yukos case is nearing its completion
On September 9, the arbitration court of the Chukotka autonomous area ruled to invalidate the agreement on the swap of shares between Yukos and Sibneft, as a result of which Yukos had received 72% of the shares of Sibneft and Sibneft had got 8.8% of the shares of Yukos. It can be presumed that Sibneft is therefore trying to get rid of the unfortunate partner, but most probably the authorities have to resolve the issue of the future owners of Yukos and are thus withdrawing Roman Abramovich from the game. Lately the leaders of various countries have been exerting pressure on the Russian leadership in connection with the Yukos case because these proceedings have a certain effect on world oil prices. The bullish sentiments on the world oil markets have been supported by news from Iraq and also by reports in the mass media that Yukos is on the verge of bankruptcy. The concern over the growth of oil prices prompted, among other things, by the Yukos developments, has also been expressed by the leaders of the countries that are the major importers of oil, in particular, by China, and, even to a larger extent, by the US leadership. According to our information, in early August, US National Security Adviser Condoleezza Rice approached head of the Kremlin Administration Dmitry Medvedev with a request to avoid any sharp decisions on the Yukos case. She said that the high price of oil was pushing up the cost of petroleum products in the country and this situation was undesirable on the threshold of the US presidential elections in the fall. US Secretary of State Colin Powell also recently expressed his concern over the Yukos developments during his talks with Russian Foreign Minister Sergei Lavrov. Moreover, according to some data, even US President George Bush raised this issue before Russian President Vladimir Putin. That is why, it is quite probable that such international pressure on the Russian leadership will serve as an additional factor to help resolve the Yukos case in the near future. As a result of that, the company's assets may appear on the open market. There is a whole range of obstacles on the way of taking market-based decisions to resolve the issue of new owners. One of such obstacles is the merger of Yukos and Sibneft, which began last year. Mikhail Khodorkovsky and Roman Abramovich took a step towards creating a single company after swapping their packages of shares. As a result of the merger, the Yukos shareholders received 92% of the shares of Sibneft. Of this amount, the Yukos shareholders paid $3 billion for 20% of the shares while the remaining 72% stake was swapped within the framework of the additional issue of shares and the mutual exchange of securities between the two companies. In November 2003, due to disagreements on some issues, Sibneft announced the suspension of its merger with Yukos. In the final account, today Yukos has 34.5% of Sibneft shares registered on its balance sheet. Despite the fact that these shares of Sibneft are frozen, in the event of the Yukos bankruptcy or the sale of its assets, Roman Abramovich can lay claims to some of these assets. His representatives have long been calling the lock-up of shares illegitimate and have been demanding its cancellation. However, as a result of the decision taken by the court yesterday, the head of Sibneft cannot directly claim a part of the assets of Yukos in the event of its sale. Despite the authorities' new statements to the effect that no one is interested in the bankruptcy of the oil giant, Yukos is already a bankrupt de facto and the state is intensively preparing to sell the company's core production assets. Yukos' most valuable assets are its oil extracting divisions, in the first place, OAO Yuganskneftegaz, which accounts for 60% of the company's total oil output. Now the Ministry of Taxes and Levies is scrutinizing the activity of Yuganskneftegaz. This company is the main asset for sale and potential owners will struggle precisely for it. According to information of Mikhail Zak, an analyst with Veles Kapital investment company, the state is interested in the sale of Yuganskneftegaz and under the law this asset must be sold no later than October 10. Now the question of the new owners of Yukos arises. There are bidders inside the country and the sale of the Yukos core assets will be preceded by the acute struggle on the domestic market. First of all, these are the persons who have done all the rough work to force Yukos into bankruptcy in the hope to get a part of its asserts and can create obstacles for the quick completion of the proceedings. Secondly, these are domestic companies, such as Gazprom, Surgutneftegaz and, possibly, the state-run Rosneft. However, as of today they do not have sufficient funds to buy Yuganskneftegaz, even despite the fact that the tax claims have reduced its selling price. Therefore, it is necessary to consider the issue of potential overseas investors capable of struggling for the assets of the oil giant. As it became known in late August, an independent valuator, Germany's Dresdner Kleinwort Wasserstein investment bank, was invited for appraisal. This decision caused some concern of US oil majors also bidding for a share of Yukos, all the more so as this decision was taken in conditions of the intensification of the Russian-German contacts at the highest level. Therefore, soon the struggle for the assets of Yukos can be expected to intensify between Russian and foreign bidders, especially considering the fact that the positions of Roman Abramovich in this struggle have been considerably weakened
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