Ragbun will come for Yukos

The company's external observer begins work

The monitoring procedure is beginning at YUKOS, and today court-appointed external monitor Eduard Regbun intends to visit the company's office. As soon as YUKOS receives a court decision, the arrest imposed back in 2004 will be lifted from the holding’s property. Theoretically, management receives the right to sell assets whose value does not exceed 5% of the book value of all company assets. YUKOS no longer has the right to pay creditors, but could spend it on production needs, since the company has recently invested virtually no money in production. However, according to the law, Mr. Ragbun can try to veto transactions on the alienation of property. The external observer does not exclude the possibility that he will take advantage of such a right, but in any case promises to act “in the interests of the debtor, creditors, and society, as prescribed by the law.” “I will look at why it is necessary to sell assets (if such a decision is made by management. - Ed. ). They have a cost estimate, which is probably enough. They no longer have the right to pay their debts - this would be a violation of the law, because it turns out that in this way they give preference to one of the creditors. I will make decisions depending on the situation,” he told Vremya Novostei.

The bankruptcy claim for YUKOS was filed on March 10 by creditor banks to which the company owed $464 million. On Tuesday, the court considered the case and ordered an external monitoring procedure (see yesterday's issue of Vremya Novostei) . “There are all the formal signs of insolvency, and the banks have filed for bankruptcy. These are Western banks, the liberal democratic West. But when the conversation is about money, no one pays attention to the pronunciation,” says Mr. Ragbun.

However, the creditors did not go to court of their own free will. In fact, at the end of December they signed an agreement with the state-owned Rosneft on the assignment of the right of claim, for which the state company paid at a discount - $455 million. Moreover, one of the conditions of the agreement was the filing of a claim for bankruptcy of YUKOS as soon as possible. The agreement established that Rosneft would pay the money on “the second working day after the date on which it receives a notification confirming that the Agent (banks - Ed. ) received a copy of the Moscow Arbitration Court’s ruling, by which the court accepted the bankruptcy petition.” The parties have complied with these conditions.

As Yukos lawyer Alexander Morozov explained to Interfax, after the introduction of the monitoring procedure, the company can make transactions with some assets. However, Mr. Morozov adds, an external observer has the right to go to court with a demand to prohibit such transactions from being carried out without his consent. As of September 30, 2005, the book value of YUKOS assets was 128 billion rubles. (about 465 million dollars).

An external observer may also petition the court to remove Stephen Theede, the president of YUKOS, who has been living in London since last year, from his post. “In the event of the removal of the president, the powers of the head pass to a candidate proposed by the shareholders or the board of directors of the company, or to the deputy president of the company or any employee of the company,” explains Mr. Morozov.

“If there are obstacles to fulfilling the requirements of the law, I really have the right to raise the issue of removing the president before the court,” confirms Mr. Ragbun. However, the outside observer does not want to make far-reaching predictions yet. “I wouldn’t like to make any probabilistic decisions. Issues should be resolved as they arise. The surveillance procedure itself is clearly defined by law. Now I am starting to analyze the situation, I will demand documents and will deal with what happened. I must obtain a court decision, inform the debtor of the rights that I have and the restrictions that the law imposes on his actions. Everything else is a probabilistic picture,” Mr. Ragbun said.

Within three months, the external observer must conduct a financial analysis of the company's condition, notify all creditors of the start of observation, and then convene their meeting. A court hearing to consider the progress of Yukos' bankruptcy is scheduled for June 27. It will be decided what the next stage of work with the company will be. As a rule, after observation, external management or financial rehabilitation of the company is introduced (takes from three to seven months). An external observer will determine the mechanisms for settlement with creditors, and if the company is able to continue its activities after repayment of debts, then a financial recovery procedure will be initiated. However, this procedure, as lawyers note, may not be introduced. The third stage of a company's bankruptcy is bankruptcy proceedings. The bankruptcy trustee is preparing the company either for liquidation or for the sale of property.

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The head of the Lithuanian government negotiating working group on the purchase and sale of shares in Mazeikiu Nafta, Minister of Economy Kestutis Dauksis, believes that the decisions of the Moscow Arbitration Court regarding YUKOS may complicate the process of Lithuania's purchase of 53.7% of the concern's shares controlled by the oil company. “This decision complicates the negotiations, so it is necessary to sort out the situation as soon as possible,” Mr. Dauksis said in an interview with Lithuanian National Radio on Wednesday. At the same time, Lithuanian Prime Minister Algirdas Brazauskas, who said on Tuesday that the deal to buy out Mazeikiu Nafta shares from YUKOS could be completed before the end of the week, now accuses the Russian company of delaying the signing of documents and negotiating dishonestly. “Unfortunately, we cannot come to an agreement with YUKOS, since all our efforts - meetings every two days - have not yielded final results. There are signals of dishonest communication between YUKOS and us, which should not happen,” he said, but did not explain what “dishonest treatment” was expressed in. INTERFAX

Denis REBROV