Berlusconi linked to Yukos rescue plan

Carolynne Wheeler in Moscow
Wednesday November 10, 2004
The Guardian

Shares in troubled Russian oil company Yukos edged up yesterday on signs that its controlling shareholder, Group Menatep, may be ready to relinquish its hold.
The Russian daily Izvestia reported yesterday that Yukos chairman Viktor Gerashchenko was suggesting that Menatep may sell its 61% stake as a way of resolving its conflict with the Kremlin.

The company is facing a tax debt of $17.6bn (£9.5bn), which is expected to drive it into bankruptcy. Its former CEO and main shareholder, Mikhail Khodorkovsky, is on trial for fraud, tax evasion and embezzlement charges that are widely seen as a move to stifle his political ambitions.

"The problem can be solved if Group Menatep sells its share in the oil company," Mr Gerashchenko was quoted as saying. He would not say who might buy the stake, but hinted that Italian prime minister Silvio Berlusconi was among those interested.

Yukos shares jumped 11% in the first three minutes of trade on the Moscow Interbank Currency Exchange yesterday, finishing up 5% on the RTS and 8.22% on Micex.

Menatep spokesman Yury Kotler refused to comment on the report, though a source in the company said Mr Khodorkovsky, who controls Yukos through Menatep, offered to dispose of his shares months ago and got no response. Analysts have maintained that the only way to head off Yukos's bankruptcy and protect minority shareholders is for Mr Khodorkovsky to divorce himself from the company.

"As the game of 'chicken' between the state and Menatep has progressed, it has become clear that the state will not flinch from destroying Yukos completely if Menatep refuses to leave. So faced with the certainty of their equity in Yukos being wiped out, Menatep might change tack on the grounds that anything is better than nothing," wrote Christopher Granville and Dmitry Dmitriev at United Financial Group brokerage, cautioning that the new owner would have to secure Kremlin approval.

(From The Guardian, 10.11.2004)