Yukos defaults on $1bn bank loan

Embattled Russian oil giant Yukos is under fresh pressure after being declared in default of a $1bn loan.

"On 2 July we received the default notice from the banks which helped us organise the $1bn loan," a Yukos spokesman said.

According to the Interfax news agency, the default warning came from a group of banks headed by Societe Generale.

The default comes as Yukos, Russia's biggest oil firm, faces potential collapse because of a $3.4bn tax bill.

Shares nosedive

Yukos has said it cannot settle the bill - which covers taxes incurred in 2000 - unless a separate court order freezing its assets is lifted.

The Moscow Arbitration Court has given the company until Wednesday evening to pay up.

The firm may also face a similar tax demand for 2001.

The default declaration means Yukos could now also be forced to pay back the $1bn loan in full, although the creditors' intentions are not yet known.

Yukos shares, which have already lost half their value since April, opened 13% lower on Monday as investors digested the news.

Russian President Vladimir Putin last month said the government had no interest in forcing Yukos into bankruptcy, raising hopes that the Kremlin was ready to do a deal with the firm.

But in a sign that the authorities are continuing to take a hard line with Yukos, investigators raided the firm's Moscow headquarters at the weekend.

Police sealed off the building on Saturday and removed several boxes of documents after a nine-hour search.

Separately, Yukos' former chief executive and major shareholder, Mikhail Khodorkovsky, is fighting charges of fraud and tax evasion. The trial of the oil billionaire is due to resume on 12 July.

Uncertain future

Yukos' legal troubles are widely seen as revenge for the political ambitions of Mr Khodorkovsky, who has been in prison since his arrest in October last year.

Mr Khodorkovsky had been funding political groups opposed to President Vladimir Putin.

Some observers believe the government wants to force Yukos' owners to cede control.

Some senior officials are said to be keen to renationalise firms controlling Russia's lucrative natural resources, which they believe were sold off too cheaply in rushed privatisations during the early 1990s.

The Yukos case has disturbed foreign investors worried about state interference in the legal process.

Also on trial is Platon Lebedev, chairman of the Menatep Group - the vehicle through which Mr Khodorkovsky controls Yukos.

On 1 July, Mr Lebedev was moved from a medical ward to a common cell with up to 20 other inmates.

The move, his lawyers said, was designed to apply pressure on him and "deprive him of the possibility of taking an active part in the trial".

HERE