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. Last Updated: 07/27/2016

Yukos Plans Stock Sales To Pay Debt

Russia's Yukos oil company, parent of Yuganskneftegaz, plans to raise $300 million in three stock offerings to partially cover 4.35 trillion rubles ($809 million) in debts, the company said Monday.


"In principle we plan three offerings to bring in $300 million," Yukos board member Konstantin Kogalovsky, first vice chairman of Bank Menatep, told a news conference.


Stockholders at an extraordinary meeting Saturday approved one new issue to increase the number of Yukos shares by 35 percent and raise $100 million, he said.


Stockholders also gave the board of directors of Yukos, which is controlled by Menatep, power to make the new issues without further approval, a company statement said.


Yukos vice president Sergei Generalov said the first issue would be used to pay 350 billion rubles in back wages and part of the 4 trillion rubles owed to the government.


The second and third issues, if approved, will be used to pay more of the government debt.


Kogalovsky said the first offering was planned for Oct. 30 and would take about two months to complete, after which Yukos will formally consider two further offerings, he said.


The company will sell 580 million new shares for 909 rubles per four-ruble nominal share in the first round. Kogalovsky said the company calculated that 909 rubles was fair market price, based on the price of shares at a closed auction of 7.9 percent of Yukos stock in May.


Current shareholders would be entitled to buy new shares in order to retain their current proportion of company holdings at a 10 percent discount on market price, he added.


Any shares not bought by current shareholders would be offered through Bank Menatep to further investors. Kogalovsky said foreigners could buy shares but were not allowed a controlling interest in Yukos.