A Moscow court on Tuesday appointed a bankruptcy administrator for Yukos, once Russia's largest private oil company, pushing it closer to insolvency and the probable nationalization of its remaining assets.
The action was taken on the first day of a bankruptcy hearing by the Moscow Arbitration Court, which also set a June 27 hearing to decide whether Yukos should be declared bankrupt.
A bankruptcy declaration was sought by a consortium of 14 Western banks after Yukos defaulted on nearly half of US$1 billion in debt.
The court approved the transfer of US$482 million in Yukos debt from the consortium of banks to Rosneft, the state-controlled oil company, and an organization that analysts say has positioned itself to take over Yukos' remaining two production units, as well as its refinery network.
The deal between the banks and Rosneft was arranged in advance and disclosed by Yukos earlier this month.
"Our reaction is there is nothing unexpected here," Andrew Smith, a Yukos spokesman, said in a telephone interview from London.
"After three years of working in the Russian court system our expectations were not particularly high," Smith said.
A Rosneft spokesman could not be reached after working hours on Tuesday.
The court appointed Eduard Rebgun, a temporary manager nominated by Rosneft, to oversee Yukos until the hearing in June, Russian news media reported. The ruling left in place the company's London-based management team at least until then.
Smith said it remained unclear what authority Rebgun would have.
Yukos, in official disfavor for more than two years, lost its largest production unit, Yuganskneftegaz, to tax authorities in December 2004 in a politically charged case.
The company's founder, Mikhail Khodorkovsky, once seen as a rival to Russian President Vladimir Putin, is serving an eight-year sentence at a Siberian penal colony for tax evasion and fraud.
The latest legal troubles began on March 10, when the banking consortium, which includes Citigroup, Deutsche Bank and BNP Paribas, filed a lawsuit in Moscow to have Yukos declared bankrupt.
The role of the Western banks was significant because Putin promised in 2004 that the Russian state would not bankrupt Yukos. Analysts suggested this month that that statement left open the action taken by the banks.
Many of the banks that lent Yukos the money in 2003 now have business with Rosneft and large interests elsewhere in Russia, Reuters reported on Tuesday.
Analysts said the latest ruling was expected and was unlikely to unnerve investors, who shied away from Russia during the initial court cases in 2004 amid jitters of a wholesale nationalization.
"It's been winding down quickly," Peter Westin, chief economist at MDM Bank in Moscow, said of the Yukos case.
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