Yukos president announces resignation ahead of creditors’ meeting | VailDaily.com

Yukos president announces resignation ahead of creditors’ meeting

MOSCOW – The possible break up of OAO Yukos, once Russia’s largest oil company, hung in the balance on Thursday after its president announced his resignation and a hotly anticipated creditors meeting that could vote to liquidate the company was suspended until next week.Yukos is in receivership, crushed by billions of dollars of back tax bills that have brought the company to near bankruptcy. Observers say the case is a Kremlin drive to restore its influence in the strategically important oil sector as well as a bid to quash the political ambitions of Yukos’ jailed founder Mikhail Khodorkovsky.The bankruptcy hearings are the final chapter in the campaign against Yukos which has seen its top mangers arrested or flee the country. In December 2004 Yukos’ biggest production unit Yuganskneftegaz was sold in an auction to an unknown shell company at a reduced price. Days later it was purchased by state-controlled oil company OAO Rosneft, now a major creditor in the bankruptcy hearings and widely expected to gather up the company’s remaining assets.A foreign consortium of banks filed for bankruptcy against Yukos earlier in the year in an arrangement with Rosneft that saw it purchase their debts.Announcing his resignation in a letter dated Wednesday, Yukos president Steven Theede, a one time executive with U.S. oil company ConocoPhillips, said he had “exhausted all possibilities … to either preserve or recover value for the company as a result of the expropriation of Yuganskneftegaz.”He singled out a failed, last minute bid to stop Rosneft’s initial public offering this week on the London Stock Exchange and said he expected the Thursday’s creditors’ meeting to be a “sham,” attended by people “intent on destroying … Yukos.”The meeting was ultimately postponed after the Federal Tax Service called for technical changes to be made to a report compiled by the bankruptcy supervisor handling Yukos’ case.Creditors reconvene on July 25. Following an assessment of Yukos’ financial health by the bankruptcy supervisor, Eduard Rebgun, they will vote to decide whether to allow the company to pursue a financial rehabilitation program Yukos has proposed, or declare the company bankrupt. Any decision on the company’s fate must then be upheld by a bankruptcy court that convenes on Aug. 1.At the creditors’ meeting Rebgun would not reveal the valuation he attached to Yukos, but said that creditors’ total claims so far admitted by a court came to nearly 500 billion rubles ($19 billion).In a statement read by a lawyer via video conference from London, Theede said that Rebgun’s report valued Yukos at about $17 billion, while a “conservative estimate” of the company’s true value was closer to $30 billion.”Yukos is solvent and Mr. Rebgun’s claims and asset summaries are flawed,” he said.Yukos management has proposed a financial rehabilitation plan, which foresees paying down its remaining debts by selling noncore and stakes in other companies. Those include 21.7 percent of Yuganskneftegaz, the former production unit, that Yukos still owns, and a 20 percent stake in Gazprom Neft, formerly Sibneft, which it still holds after a failed merger in 2003.Yukos said Thursday that it had received an offer for that stake from Gazprom Neft’s owner, state gas monopoly OAO Gazprom, which is seeking a discount to the $4.2 billion Yukos believes the stake is worth. Rebgun would have to sign off any sale.The recovery plan was always going to be a hard sell: between them Rosneft and the Tax Service hold nearly all the claims against Yukos, with $4.5 billion and $13 billion respectively, according to the Vedomosti daily.Also contributing to the video conference was Timothy Osborne, a director of the company’s main shareholder GML, once known as Menatep, through which Khodorkovsky once controlled the company.Osborne said that GML’s claims of $700 million had not been accepted and consequently the company had no vote among the creditors.”One assumes that Mr. Rebgun and the ones who instruct him are hell-bent on liquidation,” Osborne told The Associated Press ahead of the meeting Thursday.

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