YUKOS Headed For Bankruptcy ?

MOSCOW, November 5 (RIA Novosti) - Yukos CEO Steven Theede said Yukos was heading for bankruptcy, but that there were still ways for the oil company to come out of the crisis.

"I think that everybody is against bankruptcy," he said in an interview with Izvestia published Friday. "But the current situation in Yukos cannot last indefinitely. The company is financially unstable. And if we find ourselves in bankruptcy we will be forced to start the procedure. After all, the law demands this."

He said: "We are getting closer to bankruptcy with every passing day," but it is "not in the company's interests and we have to avoid it ... In the management's opinion, there are still ways to come out of the crisis."

He said the government's proposals included several alternatives to paying the tax debt (pay the debt in installments, sell part of Yukos' non-core assets or pay the debt with the company's shares).

"The company can pay its tax debts," he said. "But we have not yet received a response from the government."

Mr. Theede said it was very difficult to work when the company's bank accounts and assets were arrested. "We have been forced to take severe measures to save our cash," but this situation cannot go on forever, he said. "The most important thing for us today is to finally settle the situation," Mr. Theede said.

He said before Mikhail Khodorkovsky's arrest, Yukos stock was worth $16 and the company was worth $35 billion, while today the company is valued at $10 billion.

However, it is currently impossible to calculate the exact size of the damages to the company. "All of the questions are about the final tax bill," he said. "Yukos shareholders are concerned about this."

(From RIA Novosti, 05.11.2004)