Yukos:Bankruptcy near if no deal

Top officials with embattled Russian oil giant Yukos have warned that the next three weeks will be critical if the company is to avoid bankruptcy.

Chief executive Steven Theede and chairman Viktor Gerashchenko on Thursday painted a bleak picture of a company unable to raise cash because of what they called "an air of uncertainty."

Theede told reporters in Moscow that "if no alternative solutions are found, the company will run out of cash in the first half of August."

Theede said the company was doing everything in its power to pay a back-tax bill of $3.4 billion for the year 2000 but still faced further assessment for billions of dollars covering 2001-03.

He said court bailiffs had begun the process to sell Yuganskneftegas, which he called the "backbone of the company" -- a major subsidiary that accounts for 66 percent of corporate production.

Theede said Yuganskneftegas alone was worth at least $30 billion, which he said was 10 times the tax demands Yukos is facing for 2000 alone. Joking, he said, if it is sold by the government, "we won't get the change."

Theede said Yukos had also paid its pipeline fees to Transneft, the state-owned pipeline operator, through August but warned "if we can't pay the pipeline our oil can't move through the pipeline ... if bills can't be paid, it is difficult to continue as a going concern."

Theede said he had sent a total of 11 letters in the last six weeks to various Russian government officials showing "that we are totally flexible in what we are willing to do."

But he said the company had not received a formal response to any of the letters.

Gerashchenko said he had tried numerous times to reach senior Russian officials but was told they were busy or unavailable.

Asked by CNN whether the aim of the government was to destroy Yukos, as some analysts allege, Theede said, "I hope that's not true ... I don't think that is in the best interest of the country.

"We all understand Yukos is a Russian company and if we can't get along with the government we don't have a bright future."

Former Yukos CEO Mikhail Khodorkovsky is facing charges of fraud, tax evasion and embezzlement.

Khodorkovsky's defenders say the case is politically rigged to remove him from any influence in the company.

They say the Kremlin is carrying out a vendetta against Khodorkovsky because of his efforts to fund opposition political parties and challenge the government on the building of crucial oil pipelines.




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