Yukos can access assets

REVERSAL: Russia's largest oil producer says it has been told by the government that it can pay its bills


Fri, Aug 06, 2004 - Page 12

Yukos announced that Russian authorities have told the company its bank accounts are not frozen, giving it access to cash in a major decision the beleaguered oil giant said would help it stay afloat and make good on the massive back-tax bills it faces.

The Justice Ministry's bailiffs service told Yukos that it can use its accounts to make monthly payments to cover current operations "as the accounts of Yukos in credit organizations are not blocked," the company said Wednesday in a brief statement on its Web site.

Yukos managers had been warn-ing that unless the company gained access to accounts it said were frozen around the beginning of last month, it could be forced to halt operations and driven out business.

"We welcome the decision of the Justice Ministry," the Yukos statement quoted chief financial officer Bruce Misamore as saying.

He said it would allow Yukos to make uninterrupted payments of current taxes, as well as payments on its US$3.4 billion back-tax bill for 2000, and to "continue financing production activities."

"This, no doubt, is good news for our several hundred thousand workers and their family members," Misamore said.

Late last month, chief executive officer (CEO) Steven Theede said restricted access to cash meant that Yukos might be unable to fund its operating expenses and pay bills sometime in the first half of this month.

Citing an unidentified source at Yukos, the Interfax news agency reported that the Justice Ministry told the company that bailiffs had removed all assets from the accounts last month -- which is when they were reported frozen -- but would not remove money that is in the accounts now or is placed in them in the future.

According to Interfax, the Justice Ministry told Yukos that "an arrest cannot be placed on the accounts themselves" or on money entering them in the future.

In addition to the 2000 bill, Yukos faces a similar claim for 2001 and tax authorities are investigating its 2002 activities. The mounting tax claims, along with the trial of former CEO Mikhail Khodorkovsky, are part of a web of actions by Moscow that many observers say are part of a campaign to punish the billionaire for his growing clout and may be aimed to put at least part of the company in Kremlin-friendly hands.

The company has said that it does not have sufficient funds to pay the back-tax claims and has made repeated requests to the government to spread out payments.

Yukos has also repeatedly complained about a court order freezing its assets, which has made it impossible for the firm to raise funds by selling off peripheral units.

Yukos has offered to sell its interest in a gas joint venture with the Anglo-Russian oil company TNK-BP to help settle the bill, and the ITAR-Tass news agency reported that the sale would raise US$357 million toward the US$3.4 billion claim.