Yukos shares tumble on sale plans

Shares in Russian oil giant Yukos have tumbled, a day after bailiffs said they would sell the firm's main asset to settle a $3.4bn (£1.8bn) tax bill.

Yukos shares dropped 12% to $6 in Moscow, extending Tuesday's 14% slump. The move is the latest twist in a long-running feud between the Kremlin and a company, whose former bosses stand accused of fraud and tax evasion.

While President Vladimir Putin said he does not want to close Yukos, analysts said the sale is a worst-case scenario.

Cold comfort

Shares had rallied in recent weeks amid optimism that an agreement could be reached between the authorities and the company that accounts for a fifth of Russia's oil output.


That optimism has dissipated, with Yukos claiming that the government plans to sell off the unit, Yuganskneftegaz, at far below its market value.

It claims to have information that the price for Yugansk would be just $1.75bn, despite the division having reserves valued at $30.4bn.

The unit generates 60% of Yukos' total oil output and its true market value would be far in excess of the $3.4bn in taxes dating from 2000 the court has ordered the company to pay.

"It's not going to be an auction - simple, legal or transparent," said Steven Dashevsky at Aton brokerage in Moscow.

Analysts said they were concerned the sale would amount to a giveaway to a company close to the Kremlin.

Leading the pack, many believe, is Surgutneftegaz, with other candidates such as gas giant Gazprom and state-owned Rosneft saying they were not interested.

Trouble in store

Yukos also may be hit with another bill for the 2001 year.

On Monday the firm lost a court bid to stay the bailiffs' demand. A court said it could appeal - but only on 6 September. Until then, it must pay up.

Adding to the confusion surrounding the company are claims by Yukos that it is unable to pay the tax bill immediately because its assets are frozen by court order.

Former chief executive Mikhail Khodorkovsky, meanwhile, was in court on Wednesday to hear some of the tax and fraud-related charges he faces read out by prosecutors.

Last week, he described the accusations against him as "shameful".



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