14 June 2004 00:00
Yukos may offer equity for tax
ByLine: Andrew Jack in Moscow
Executives at Yukos, the embattled Russian oil group, are considering issuing new shares to be sold for cash or given
to the government as a way to settle tax claims of at least $3.4bn, an executive at the company indicated on Sunday.
The move could significantly dilute the holding of Menatep, the group of controlling shareholders led by Mikhail
Khodorkovsky, the former chief executive set to face a criminal trial this week, and hand strong influence in the
company to the Russian state. Minority shareholders could also see their stakes diluted.
The idea is one of several being explored by Yukos that the company official said had been proposed to the government
last week as a way to pay off rising tax demands. However, it is subject to a court order that blocks any asset
sales.
The executive said other options discussed by the company's executive board included gaining permission from the
authorities partially to lift the freezing order in order to sell assets, such as its stake in the oil group Sibneft or
its gas fields, or give it time to raise additional credit to meet the bill.
However, another company executive and an adviser to Menatep denied knowledge of the schemes.
Yukos theoretically risks the prospect of bankruptcy as soon as this Friday, when a Moscow court rules on whether to
uphold a $3.4bn claim by the tax ministry for alleged tax evasion in 2000.
The company, which is vigorously contesting the assessments in court, is concerned that fresh bills for subsequent
years could push total tax demands as high as $10bn, well beyond its capacity to pay.
Bruce Misamore, Yukos's chief financial officer, who said he was unaware of any approaches to the authorities,
said the company currently had only about $800m in cash, and that the tax demand was likely to hinder its investment
plans and risk pushing it into bankruptcy.
He said Yukos was still in talks about changes to loan agreements to its lenders over the possible restructuring of
$2.6bn in debt.
Mr Misamore added that Yukos had also provided the banks with an additional guarantee of payment from its main oil
producing subsidiary based in the Siberian town of Nefteyugansk, on top of the existing guarantees from the parent
company secured on oil exports.
In addition to its appeals on the tax charges, Yukos is fighting legal decisions to annul its merger with Sibneft,
which was implemented last year.
Mr Khodorkovsky and his business partner Platon Lebedev face nearly $2bn in fraud and tax evasion charges in a
separate criminal trial due to open on Wednesday.
[FT.com site] |
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