Arbitration drawbar

Well, what else, it seemed just recently, could the Russian court surprise the public with? Skeptics are put to shame. How can it be, it turns out. On Friday, the Moscow Arbitration Court satisfied the claim of Rosneft Oil Company and Baikalfinance Group LLC to invalidate the Agreement dated May 24, 2004 to secure a loan of $1.6 billion issued to YUKOS in 2003 by Societe Generale Bank. In other words, the Arbitration Court made a decision that frees the Yuganskneftegaz company, now owned by Rosneft, from a debt of $1.6 billion. This debt, without any doubt, will be “hung” on the bankrupt YUKOS, which will make the issue of the company’s bankruptcy practically resolved. And Rosneft, which bought Yuganskneftegaz at a very moderate price (including due to debts), earned quite good money in one day.

Rosneft managed to convince the court, citing the fact that the Societe Generale bank acted only as an operator for the loan. The money was given by the company Moravel Investment LTD, to which the bank ceded the right to claim the loan and which, in turn, was controlled by Group MENATEP, the former main shareholder of YUKOS. Why it follows from this that Yuganskneftegaz should not repay the loan is not entirely clear.

In principle, artificially encumbering a company that may be subject to a hostile takeover is one of the most common methods of protection, including in the West. In the event of an artificial bankruptcy attempt, the majority in the board of creditors is obtained by the owners, who appoint a bankruptcy trustee. The scheme may not be particularly attractive, but it is absolutely legal. The funny thing is that this particular case does not fit into it.

Firstly, in September 2003, when YUKOS took out a syndicated loan, there was no talk of its bankruptcy, and only those who ultimately organized this defeat could have guessed about the impending defeat of the company. Secondly, YUKOS really needed money at that time - the merger with Sibneft was in full swing, under the terms of which Roman Abramovich was paid a very large sum. In early October, he received $3 billion for a 20% stake in Sibneft. The decision to secure the loan with supplies of oil produced by Yuganskneftegaz is also quite logical and is not at all explained by an attempt to incorporate a “poison pill” into the main producing asset of YUKOS. In May 2004, Mikhail Khodorkovsky was already in prison, and YUKOS was facing tax claims for almost 100 billion rubles. However, at that time no one (except for the same organizers of the Yukos defeat) could have imagined that the state, in order to pay off the alleged tax debt, would want to take away Yuganskneftegaz, and not, say, the same 20% of Sibneft, which cost almost as much as as much as needed. Lenders who wanted to receive additional guarantees of the return of their money can also be understood. After all, a loan is not a gift, even if it is provided to a company by its shareholders. Oil is a completely liquid asset, and pledging it as collateral for loans is commonplace. The arbitration court, however, decided otherwise. What follows from this?

First of all, the question arises whether a subsidiary can be liable for the debts of the parent company. Based on court decisions, it turns out that the answer to this question depends on who currently owns this subsidiary company. If it’s YUKOS, maybe. After all, Yuganskneftegaz was taken away from YUKOS to pay off the parent company’s debt to the tax authorities. But now, when Yuganskneftegaz belongs to Rosneft, it can no longer do so. Although here everything is far from clear. The most piquant thing in this whole situation is that Rosneft itself managed to pawn the oil produced by Yuganskneftegaz even before purchasing this production enterprise. The oil was used to secure a loan provided by Chinese banks precisely for the acquisition of Yuganskneftegaz at an auction. It’s time for the Chinese to think about it, since the decision of the Moscow Arbitration Court may turn out to be a precedent, and after some time (for example, when oil becomes more expensive), instead of oil they may receive another court decision.