Yukos unit may be sold for $4bn

Yukos' future has been thrown into fresh doubt amid reports that Russia is planning to sell 77% of its key oil production unit by the end of November.
Adding to the concern is a local media report that Yuganskneftegas, which accounts for 60% of Yukos' oil output, may be sold for $4bn (£2.2bn).

Shares in Yukos fell by more than 11% during early trading in Moscow.

Yukos is facing an $8bn bill for unpaid taxes and fines and investors now fear the complete break-up of the company.

Cut-price?

Investment bank Dresdner Kleinwort Wasserstein (DKW) valued has valued the Yugansk business at between $14.7bn and $17.3bn.

However, the Russian news agency Interfax has reported that the starting price at auction for the stake is likely to be $4bn because of a system of discounts.

It added that Gazprom, which is 38% state-owned and produces a fifth of the world's natural gas, is a possible buyer.

"Most likely one of the companies affiliated to Gazprom will take part in the auction," an unidentified Russian official told Interfax.

Shareholders have condemned the forced auction saying it may lead to the complete break-up of Yukos and that there is no guarantee that they will get any proceeds of the sale.

The Justice Ministry has not commented on the date and conditions of any sale.

Political row

Analysts have speculated that a key driver of the spat between Yukos and President Vladimir Putin's administration is the desire to bring a major chunk of Russia's oil resources back under government control.

Another reason behind the crackdown is thought to have been the political ambitions of Yukos's former chief executive, Mikhail Khodorkovsky.

Mr Khodorkovsky, who had supported liberal opposition groups, has been in prison since October last year on fraud and tax evasion charges.

The Russian government has been pursuing Yukos for tax avoidance since the beginning of the year.

The company's bank accounts were frozen by a court order some months ago, leaving it with no option but to sell some of its businesses in order to raise cash.

Yukos shares were trading down 8.2% at 122 roubles in Moscow.

(From: BBC News)