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Yukos oil company said it had filed for bankruptcy and reorganization in a United States Court, under Chapter 11 of the US Bankruptcy Code.
The company’s management continues to run YUKOS’s business and manage its properties, the oil company said in a statement. YUKOS asked the court for a temporary restraining order halting the planned auction of its main production unit,Yuganskneftegaz. The auction is scheduled for December 19.
The embattled oil company also asked the court to force the Russian government into arbitration over demands for billions of dollars in compensation for damage to the company since the Russian government demanded massive backpayments of taxes from YUKOS.
YUKOS CEO Steven Theede called the move "the only resort" left for the company, its shareholders, employees and clients. He said the management of YUKOS has worked tirelessly and in good faith over the past year to establish a dialogue with the Russian authorities in an attempt to work out a compromise that would have prevented the reorganization filing. “We have submitted more than 70 settlement offers and publicly stated that reorganization was a distinct possibility if a reasonable resolution was not reached. It is regrettable that we did not receive one substantive response," Theede was quoted as saying.
Meanwhile, analysts say YUKOS’s latest move will not prevent the auction of its key production subsidiary Yuganskneftegaz. Anton Zatolokin, an analyst with MDM Bank, called it “another PR action, putting pressure on Russian authorities and international banks that are going to lend Gazprom money for the acquisition of Yuganskneftegaz.” “American courts do not have direct influence on Russian government agencies, and YUKOS is not a US company,” he stressed.
For his part, Alexei Kormshchikov of Uralsib sees YUKOS’s filing as an attempt to gain time and delay the sale of Yuganskneftegaz. In theory, he says, a US court could decide in YUKOS’s favor and annul the results of the Yuganskneftegaz auction. “But YUKOS has a small chance,” he noted.
Earlier on Wednesday, three foreign members of the YUKOS Board of Directors - Sarah Carey, Raj Kumar Gupta and Jacques Kosciusko-Morizet - resigned. They said they were unable to act in the interests of shareholders in the situation when Russian authorities were seeking the collapse of the company.
YUKOS shares dropped on the news. As of 12:30 Moscow time, YUKOS was 10.35 percent down to RUR 21.22 per share on the MICEX. Its ADRs slipped 16.67 percent to $2.75 per share on the London Stock Exchange. On the Frankfurt Stock Exchange, YUKOS fell 11.65 percent to EUR 2.2 per share.
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