Yukos knock-down sale plan

The Russian government last night appeared poised to sell the main asset of Yukos, the country's embattled oil company, for as little as $4bn (£2.2bn) - a fraction of its fair value - in a move analysts branded "daylight robbery" and "a worst-case scenario".


In what seemed to be a government leak, Russian news agency Interfax said the government would auction 76.8 per cent of Yuganskneftegas - which had been valued by investment bank Dresdner Kleinwort Wasserstein at $14.7bn-$17.3bn - for just over $4bn. The stake represents 100 per cent of the voting shares in Yuganskneftegas.

One state official close to the situation warned that nothing had yet been finalised but confirmed that this was one of the options put forward by the justice ministry, which had seized Yuganskneftegas in lieu of Yukos's back taxes.

A senior government official quoted by Interfax said an affiliate of Gazprom, the state gas monopoly that recently announced a merger with state-owned Rosneft oil company, could bid for the asset.

A sale at that price to a state monopoly would devastate the Russian market, demonstrate disregard for the rights of minority shareholders and in effect put an end to Yukos's being one of Russia's largest oil producers. "This is really the worst-case scenario. It is a sad joke," said Al Breach, chief strategist at Brunswick UBS, a Moscow-based brokerage.

The plan to sell Yuganskneftegas - a wholly owned subsidiary of Yukos that produces 60 per cent of its oil - brings to a head a year-long offensive against the company and Mikhail Khodorkovsky, its major shareholder, who is charged with tax evasion and fraud. Bruce Misamore, Yukos's chief financial officer, called the plan "a grossly deficient value of assets".

In spite of yesterday's leak, it is believed that Russian Federal Property Fund, which must administer the sale, has not yet definitively set the price or the size of the stake.

Some observers suggested the leak was designed to test public opinion and "shoot down" the auction at the knock-down prices. It comes at a time when Vladimir Putin, Russia's president who is believed to have given a go-ahead for the attack on Yukos, is on an official visit to China. This gives him an opportunity either to distance himself from a sale or to come to the rescue of investors.

Earlier this week the justice ministry said it would sell Yuganskneftegas to cover Yukos's tax arrears, which it estimated at $3.73bn.

However Yukos's total tax bill now exceeds $8.5bn.

The disclosures came after the close of the Russian stock market.

(From: Financial Times)