Yukos Is Put Under External Manager

The Moscow Arbitration Court on Tuesday put Yukos under external supervision until June 27 in a move that could lead to its bankruptcy and nationalization.

Tuesday's ruling to put Yukos under external supervision means that the existing management and board will remain in place, but major decisions will have to go through Eduard Rebgun, a temporary manager appointed by the court on Tuesday.

Rebgun, who was proposed by Rosneft, will carry out a financial analysis, determine the amount of liabilities, draw up a list of creditors and organize the first meeting of the creditors' committee.

Based on the committee's recommendations, the court may choose from two possible fates for Yukos -- external management or bankruptcy administration and sale of assets.

Adam Landes, an analyst at Renaissance Capital, predicted a quick end.

"Given that Rosneft, and the state, appear to be holding all the cards, we foresee a fairly quick decision. Closure of the 'Yukos Affair' as quickly and cleanly as possible is needed to support Rosneft's planned IPO," he wrote Tuesday.

Landes said Rosneft was claiming about $10 billion from Yukos, roughly on a par with the state's remaining tax claim.

The market is watching to see whether Yukos will be broken up and sold off in pieces or fully taken over by Rosneft, thus leaving some value for its minority shareholders.

The bankruptcy suit was filed earlier this month by a group of Western banks, following their deal with Rosneft for Rosneft to buy back $482 million of Yukos debt that was secured on Yugansk oil and being chased by the banks.

Most of the banks that were lenders to Yukos are also creditors to Rosneft and have huge business interests at stake.

And the action by the 14 banks, which include Deutsche Bank, Citigroup, ING, BNP Paribas and Commerzbank, leaves Rosneft poised to reap most benefit from Yukos' winding up.

The bankruptcy is also likely to unite a bevy of international court proceedings brought against Yukos by creditors in places ranging from Amsterdam to New York.

"Now you have a situation where each creditor is going after Yukos in different courts around the world, suing it for debt. But now, all the other lawsuits are likely to be suspended until the Russian bankruptcy proceedings are settled," said Peter Clateman, a Moscow lawyer who heads the legal team of Russian investment group Sputnik.