Capitalism: the Russian way

Discussion in 'Wall St. News' started by DVB, Apr 26, 2004.

  1. DVB


    Ahhh, wild capitalism in Russia... now the banks are screwd for a cool billion dollars. Is Citi in the loop again? I remember they got fried in 1998.:confused:

    Yukos: Banks Warn Of Possible Default On $1B Synd Loan

    April 26, 2004 11:03 a.m.

    MOSCOW -- Russia 's largest oil producer OAO Yukos (YUKO.RS) said Monday it had received a letter from banks that participated in a $1 billion syndicated loan warning of a possible default.

    According to the letter, dated April 23, the banks cited a $3.5 billion tax claim as the reason for the warning, Yukos said. This tax claim, totaling 99.38 billion rubles ($1=RUB29), was the basis for a recent Moscow court ruling that effectively froze most of Yukos' assets.

    Standard & Poor's last week lowered Yukos' long-term corporate credit rating five notches, to 'CCC' from 'BB-'.

    The letter confirms that Yukos is still allowed to conduct export operations, but also notifies Yukos that "the lenders may exercise their rights with respect to certain bank accounts" that act as collateral and that the banks may use the money in these accounts "at their discretion in the future."

    "The actions of the tax ministry have reduced Yukos' creditworthiness and have also caused considerable anxiety to a number of the largest financial institutions in the world," a press release quoted Yukos Chief Financial Officer Bruce Misamore as saying.

    Yukos added in its statement that it "has been meeting repeatedly with its lenders and will continue to maintain such discussions and take such actions as it deems appropriate to ensure that all obligations under the financing agreements are met."

    Societe Generale (10380.FR) is coordinator of the syndicate, which also includes Citigroup Inc. (C), Commerzbank AG (CBK.XE), Credit Lyonnais, Deutsche Bank AG (DB), HSBC (HBC), ING Bank NV (INK.YY), KBC Bank (KBD.DU), BNP Paribas (13110.FR) and UFJ Bank Netherland.

    The loan, which consisted of a three-year and a five-year tranche, was syndicated just three days after the Oct. 25 arrest of then-Yukos Chief Executive Mikhail Khodorkovsky.

    Yukos and its major shareholders have come under the scrutiny of various government and law-enforcement agencies in what many observers believe to be a Kremlin-sanctioned bid to curb the influence of Khodorkovsky. Russian President Vladimir Putin's administration has denied this accusation, saying the legal probe is part of a nationwide campaign to root out corruption.

    Company Web site:

    -By Anna Raff, Dow Jones Newswires (+7 095) 974 8055;
  2. diceman


    well, far away from being screwed yet. loans are not due for 3-5 years, yet there is a chance they may ask for early repayment if interest payments are not made in time. yukos assets are far greater than the loan, the problem is they are frozen by the govt. but their cash flow is not. i am sure it was a political move by lenders to put pressure on russian govt.