With the starting price of RUR22.7bn ($878.48mn, or €650.24mn), nearly 707 steps were made during the nearly three-hour long auction, each step, or increment, amounting to RUR110.335mn ($4.27mn, or €3.16mn). Three technical breaks were taken.
The number of steps was record-high in the history of the Yukos auctions (the previous record, 105 steps, was registered at the auction held to sell Yukos’s stake in the Khanty-Mansi Bank).
The sum of the deal seems staggering at first sight. The most attractive part of the lot was Yukos’s headquarters with a floor space of more than 27,000 sq m, which experts initially evaluated at $250-$300mn. However, the battle was waged not only for the bankrupt company’s real estate, but also for the millions of dollars frozen on the accounts of the Yukos-M Trading House and Yukos’s trading divisions registered in tax havens.
Before the auction, the turnover of Yukos-M, which was part of Yukos-RM, was RUR20-RUR30mn monthly (about $12mn annually). Yukos-M bought oil from Yukos’s producing subsidiaries, which had been turned over to Rosneft, for refining or for resale; it also traded in petrochemicals.
Unlike the accounts of Yukos and its subsidiaries, from which money was deducted for the payment of the company’s debts, the bank accounts of the Yukos-M Trading House have not been frozen because they were used to finance the holding’s daily operations. This is what the 707-step fight was for.
After the preliminary competition, two companies were allowed to take part in the auction proper– Neft-Aktiv, a second- tier subsidiary of state-run oil company Rosneft, and an obscure company Prana. Officially, the owners of Prana are its director Vladimir Yesakov (1%), and Parson Consulting Inc, registered in the Seychelles. Prana is registered in Tver in the same building with a food store and several midget companies.
It was initially rumoured that Prana was acting in the interests of Gazprom, but the energy giant refuted the rumour as untrue.
However, if the dark-horse company could outbid Rosneft, it clearly is a front for somebody’s large capital.
The May 11 auction should put an end to the bankruptcy proceedings of Yukos, once the leading oil producer in Russia, because it seems to have collected enough funds to repay its creditors. The company needed RUR709bn ($27.44bn, or €20.31bn) to repay its debts, while its bankruptcy receiver Eduard Rebgun collected RUR713bn ($27.59bn, or €20.42bn) by the last auction, whose starting price was RUR22bn ($851.39mn, or €630.19mn).
In accordance with the law on bankruptcy and Russian business practice, the surplus money will be used for the company’s operating expenses, as Yukos remains a highly complicated and expensive economic mechanism even at the final stage of its bankruptcy. After it settles accounts with creditors, the Moscow Arbitration Court will consider the report of the bankruptcy receiver and will either liquidate the company or close the bankruptcy procedure, in accordance with the law.
Some time before the sale of Yukos’s Moscow headquarters, Neft-Aktiv bought Yukos’s Samara assets (100% of Samaraneftegaz and the Kuibyshev and Syzran oil refineries). On the same day, a dark-horse company Unitex bought the oil major’s network of petrol stations in the Moscow Region, Yukos-Ladoga and Yukos Aviation Marketing, as well as its energy sales companies in the Belgorod, Bryansk, Voronezh, Lipetsk, Tambov, Orel, Penza, Tver and Ulyanovsk regions.
Even after losing its industrial assets and headquarters, Yukos can continue working. Nobody wanted to buy some of its assets, and selling them for peanuts under the watchful eye of controlling agencies and the press would be unwise.
As a result, Yukos still holds 49% in Slovakia’s Transpetrol (worth some $100mn) and $200mn of assets in generating companies in the Krasnodar Territory in southern Russia (their sale to Promregion Holding was stopped by the Federal Anti-trust Service). According to the FAS, the latter assets may be eventually turned over to Rosneft, another bidder for them apart from Promregion. Yukos also had minor holdings (up to a blocking stake) in several independent marketing companies that own petrol stations. Taken together, its remaining assets have been evaluated at RUR10bn (about $400mn).
There is no need to kill off the once most powerful oil company in Russia.
It will eventually settle its debts with creditors and even keep several billion roubles raised by its bankruptcy receiver.
Liquidation expenses and current outlays, which it will have to pay one way or another, will not run into billions of roubles. In other words, Yukos’s demise may not be final.
