Guardian Unlimited | The Guardian | Yukos shares slide on news of forced sale

Shares in Yukos, the embattled Russian oil company, came under renewed pressure today as it faced the forced sale of a key subsidiary.
In morning trade, Yukos shares fell 11% to $6 (£3.25), bringing its losses to nearly 25% since yesterday, when bailiffs said they would sell the firm's main production unit, Yuganskneftegaz.

Analysts expressed surprise that the shares had not fallen even more sharply after the news that Yugansk, the Siberian subsidiary that produces over 60% of Yukos's oil, would be sold, in a nightmare scenario for the firm.

"I'm just amazed that, after the sort of news we had yesterday, Yukos doesn't cost $3 (£1.62p). It didn't even show a new low," Arsen Khachaturiants, a salesman at CentreInvest Securities, told Reuters.

Last month the shares hit $5.80, their lowest level since January 2002. Yukos has faced a potential firesale of assets since missing a deadline to pay $3.4bn in back taxes for 2000, but bailiffs had been expected to spare Yugansk.

Analysts say the subsidiary is worth around $12bn after a discount for urgent disposal. Yukos said yesterday it had information indicating it would be sold for just $1.75bn.

Yukos sank further into crisis when the justice ministry said yesterday it would seize Yuganskneftegaz to meet $3.4bn in tax claims. Yukos believes the demand is unfair, while most commentators say that Vladimir Putin, the Russian president, has decided to make an example of Yukos because its former chief executive, Mikhail Khodorkovsky, was meddling in politics by funding opposition parties. Mr Khodorkovsky is currently on trial on fraud charges.

Yuganskneftegaz is the jewel in Yukos's crown; it provides more than 60% of Yukos's total output of oil and is in the top 12 oil-producing companies in the world, its production ranking along that of a country such as Algeria.

US and British officials have expressed concern at the Yukos case, while foreign companies have been taken aback at the Russian government's heavy-handed treatment of one of Russia's most strategic companies.



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