14 June 2004 00:00
Yukos may offer equity for tax OIL & GAS:
ByLine: By ANDREW JACK
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 Dollars 3.4bn, an executive at the company indicated
yesterday.
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 Dollars 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 Dollars 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 Dollars 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 Dollars 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 Dollars
2bn in fraud and tax evasion charges in a separate criminal trial due to open
on Wednesday.
[COMPANIES INTERNATIONAL] |
RUSSIA IN FACTS
