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. Last Updated: 07/27/2016

Yukos, Sibneft Reset Deadline for Merger

The merger of Russian oil companies Yukos and Sibneft into the giant holding company Yuksi will now take place by the end of the year and not by the original July 1 deadline, Yuksi chairman Mikhail Khodorkovsky said Tuesday.

Speaking in Zurich, the oil executive was quoted by Reuters as saying that several stumbling blocks had arisen to delay the merger that will create Rus sia's biggest oil company by reserves and production.

"Unfortunately, the merger has required much more effort than we had previously expected it would require," Khodorkovsky said. "Quite a few issues have arisen of both a legal and a personal nature. All these issues can be resolved but they will all require time to resolve."

Khodorkovsky's statement confirmed recent market rumors that conflicts had stalled the creation of Yuksi, in which Yukos is to take a 60 percent and Sibneft a 40 percent stake. Khodorkovsky said Tuesday that terms of the merger will not change.

It was not clear how the delayed timetable will affect French oil major Elf Aquitaine's purchase of a 5 percent stake in Yuksi. The foreign investor was to pay $528 million for the stake once the merger papers were signed.

Khodorkovsky, head of the Yukos-Rosprom group, said Yuksi will elaborate on the state of the merger by the end of the month. He said that the management will delay tentative plans to issue Yuksi bonds in the second half of 1998.

Oil analysts in recent weeks have speculated the merger would not take place at all, pointing to alleged ownership disputes and political differences between Khodorkovsky and Sibneft investor Boris Berezovsky.

In a sign all was not well, members of Sibneft's finance team left Yuksi headquarters and moved back to their Sibneft offices last week, a Sibneft employee confirmed. A Yukos spokeswoman, however, said the departure was a planned rotation of Sibneft staff.

Some analysts have said Sibneft could be pushing for a greater stake in Yuksi in exchange for helping Yukos meet its current loan obligations.

Yukos has borrowed about $1.2 billion in recent months, offering its oil exports as a guarantee of payment. But since oil prices have dropped dramatically, the company could be asking Sibneft for cash, analysts say.

Political differences could also be an obstacle, according to Alexander Blokhin, an analyst with United Financial Group. Some of Berezovsky's recent political maneuvering has irritated the Kremlin and also Khodorkovsky, who prefers to keep a low political profile.