Yukos Shares Gain in U.S. as Khodorkovsky Offers to Settle Bill

OAO Yukos Oil Co. shares jumped 10 percent in the U.S. after Mikhail Khodorkovsky, the company's biggest owner, offered to give up his holding to help settle a 99.4 billion-ruble ($3.4 billion) tax bill, prompting investor optimism that Russia's biggest oil exporter may avoid bankruptcy.

The company's American depositary receipts rose $3 to $33 on the Inet ATS trading system as of 4:12 p.m. in New York. Yukos had been given until midnight in Moscow (4 p.m. in New York) to pay Russia's largest tax bill. Yukos said it's concerned bailiffs may disrupt its operations as they seek to collect the tax bill.

A yearlong investigation into Moscow-based Yukos and its owners has helped push up world oil prices, on concern the case may disrupt its output. Investors and analysts said Russia won't end its probes of Yukos unless Khodorkovsky and his partners at Group Menatep abandon their controlling stake in the company.

``Bankruptcy isn't palatable for the Russian government, an unconditional surrender of the Menatep stake, on the other hand, would be,'' Adam Landes, a London-based analyst at Renaissance Capital, said in an e-mailed message. ``The prospects of a deal are greater than the Yukos share price assumes.''

Yukos, which pumps more oil than Libya, the eighth-biggest producer in the Organization of Petroleum Exporting Countries, is fighting to survive just as it tries to boost output after oil prices rose to records. Moscow-based Yukos's fate depends on whether the government lets the company spread out payments while President Vladimir Putin bolsters his influence over an industry that generates at least a third of Russia's export revenue.

Khodorkovsky's Offer

``My client, Mikhail Khodorkovsky, offered Yukos's board the use of the Yukos stake controlled by its main shareholders for the resolution of the government's tax claims,'' said Anton Drel, Khodorkovsky's lawyer, in a faxed statement. He also urged the company's managers not to declare bankruptcy.

Khodorkovsky, 41, who is in jail awaiting trial on tax evasion and fraud charges that he denies, owns a controlling stake in Group Menatep, which owns about 53 percent of Yukos.

The government hasn't received an offer from Khodorkovsky, said Alexander Zharov, a spokesman for Prime Minister Mikhail Fradkov. Russian Finance Minister Alexei Kudrin wasn't available to comment on Khodorkovsky's letter when contacted by Bloomberg News through his press office.

`Disproportionate' Gain

Yukos's shares rose on the Khodorkovsky offer partly because some investors have been borrowing the company's shares and selling them, expecting further declines that would allow them to profit by buying back the shares at a lower price, said Ian Hague from Firebird Management LLC.

``The slightest bit of positive news about Yukos can have a disproportionate effect, because a lot of people have been betting it will fall by shorting the stock,'' said Hague, who manages $500 million in stocks in the former Soviet Union at Firebird in New York.

Yukos shed almost a fifth of its market value last week after bailiffs said the company had five days to pay its bill, for taxes avoided in 2000. On Friday, tax authorities said Yukos owes another $3.4 billion in taxes and penalties for 2001.

Courts have frozen Yukos's bank accounts and prevented the company from selling businesses to raise money to cover the tax claim. The company has about $1.4 billion in cash on hand, Chief Financial Officer Bruce Misamore said yesterday.

HERE