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19 November, 2004 - Published 11:06 GMT
Yukos auction date announced
Officials in Russia have announced a date for the auction of a majority stake in Yuganskneftegaz, the key production unit of the troubled oil company Yukos. This report from Sarah Rainsford:
Yuganskneftegaz will be sold at auction on December the nineteenth. That's one month after this official announcement and just one day before Yukos shareholders planned to meet to discuss the possibility of filing for bankruptcy. The unit is the backbone of Yukos. It pumps over sixty percent of its total oil output. But this sale was ordered by the courts, who claim the oil giant owes over eighteen billion dollars in tax debts.
The government commissioned a Western bank to value Yugansk -- but the starting price set for this auction is well below the lowest figure they came up with. At eight-point-six billion dollars, it's also less than half the value Yukos itself places on the unit. The auction announcement says there will be no restrictions on bids by foreign investors. But this is a politically-charged case and the low starting price named has given further fuel to speculation here that the jewel in the Yukos crown will be a bargain buy for a firm closely tied to the Kremlin.
Sarah Rainsford, BBC