27 April 2004 22:21
Moody`s places Sibneft`s ratings under review for possible downgrade
LONDON. April 27 (Interfax) - Moody's Investors Service placed the Ba2 senior implied and Ba3 senior unsecured
note ratings of OAO Siberian Oil Company ("Sibneft") under review for possible downgrade, reflecting
increasing pressure on the liquidity of its 92% shareholder, YUKOS Oil Company, and uncertainties over Sibneft's
own position, should YUKOS become insolvent, the rating agency said in a press release.
Moody's said the review for possible downgrade reflects the potential impact on Sibneft of the rising financial
demands being placed on YUKOS. This pressure has been driven up in recent days by the decision of the Moscow Arbitration
Court to freeze YUKOS's assets at the request of the tax authorities who are claiming $3.5 billion in unpaid taxes
from the company and by today's announcement that YUKOS's $1 billion pre-export secured loan banking syndicate
has given notice to the company of a potential event of default. It is unclear, in Moody's view, how a default at
YUKOS would impact Sibneft, particularly as the ownership of Sibneft is in dispute and YUKOS has little control over the
company. Moody's notes that the forthcoming tax judgement due on May 7th may prove decisive to YUKOS's
future.
The rating review will seek to determine to what extent Sibneft's ongoing ability to service its debt under
current and potentially changing circumstances is still compatible with its Ba2 senior implied and Ba3 note ratings. The
latter are based on Sibneft's operational and financial fundamentals which remain stable but may be susceptible to
its association with YUKOS, should the latter be forced into insolvency. In addition, the review will assess other
uncertainties such as the appropriateness of Sibneft's corporate governance and vulnerability in its own right to
external impositions such as potential back-tax demands.
OAO Siberian Oil Company ("Sibneft") is one of Russia's leading vertically-integrated oil companies.
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