Western Banks May Call in Yukos' $1B Loan

A top official at Russia's battered oil giant Yukos on Monday accused the government of driving the company to the brink of insolvency as a group of Western banks signaled it might call in a $1 billion loan.

Yukos has been ordered to pay a 99.4-billion-ruble ($3.4 billion) back taxes bill by Thursday. Its bank accounts were ordered frozen last week and a freeze on its assets remains in place, giving the company no way to raise money to pay the bill.


"The actions of representatives of the Russian government have led Russia's best and most creditworthy company to the brink of an unintended and artificial situation of insolvency and possible bankruptcy, creating an unthinkable default situation with its bank lenders," Yukos chief financial officer Bruce Misamore said in a statement.


Societe Generale, the lead-arrangers for the lenders' syndicate that gave notice on Monday, said the banks don't want to "jeopardize" the besieged company, but the notice means the banks can call in their debt at any time.


Adding to the company's troubles, the Tax Ministry last week issued a bill for another 98 billion rubles ($3.3 billion) in back taxes for 2001 on top of the amount owed for 2000.


Some analysts have suggested that further crushing claims could be on the way.


The Kremlin has repeatedly claimed that the actions against Yukos and its jailed former CEO Mikhail Khodorkovsky are part of a broader drive against economic crime and corruption.


But observers see the company's woes as being the direct result of Khodorkovsky's alleged political aspirations and his funding of opposition parties ahead of last December's parliament elections.


Company spokesman Alexander Shadrin said Yukos would try to reassure its creditors at a meeting slated for Tuesday.


A spokeswoman for Societe Generale stressed that the banks want to avoid triggering Yukos' bankruptcy.


"The syndicate banks haven't asked for immediate repayment of the loan in order not to jeopardize Yukos' operations and because they want to support the company," the spokeswoman said.


Shadrin said Yukos has not received any default notices from its other lenders, which include Menatep, the holding company through which Khodorkovsky and associates control the company, the Interfax news agency reported. Menatep has lent Yukos $1.6 billion.


Yukos stock dropped 3.8 percent Monday on the RTS index having plummeted 17 percent before trading closed for the weekend.


Over the weekend, the company's towering downtown offices were cordoned-off by special services officers as investigators confiscated documents from mangers' offices.


Since the investigation into Yukos began a year ago, the company has lost about half its market value.


With a daily output of about 1.72 million barrels, or nearly one in every five that Russia extracts, the company is the country's largest in terms of production. It employs about 105,000 people


Its disintegration could tarnish Russia's image abroad and slow growth in the oil sector — the country's main cash earner and an industry that bolsters President Vladimir Putin's international clout.


Putin said last month that the government isn't interested in seeing Yukos driven into bankruptcy. But analysts have speculated that the company's only chance for survival is if Khodorkovsky and his associate Platon Lebedev — who like Khodorkovsky is jailed on charges of fraud and tax evasion — and other key shareholders relinquish their shares.

"The government has shaped things in such a way that it is impossible for them to pay the claims," said Paul Collison, an oil and gas analyst at Brunswick UBS.

Meanwhile, some Yukos minority shareholders filed a lawsuit in New York against Yukos, Group Menatep, Khodorkovsky, Lebedev and other key Yukos shareholders that accuses them of misleading the minority shareholders about the health of the company ahead of Khodorkovsky's October arrest, Russia's Vedomosti business newspaper reported Monday.

The holders of just over 5 percent of Yukos stock sent a letter to Putin last week requesting that he regulate the situation with Yukos.

"We have purchased Yukos shares in good faith and we would like the Russian government and court to know that effective expropriation of our investment in the company would cast a great deal of doubt on the security of private property and investors rights in the country," said the letter, a copy of which was obtained by The Associated Press.

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