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. Last Updated: 07/27/2016

Rosneft Unit Sale Stands

Russian oil company Rosneft said Monday that it had lost a legal action aimed at reversing the seizure by creditors of its Purneftegaz subsidiary, which was later sold for only $10 million.

A spokesman for Rosneft said a Moscow arbitration court had rejected the company's lawsuit to stop the seizure of 38 percent of Purneftegaz, which makes up 51 percent of voting shares. Rosneft estimated the stake was worth $400 million to $500 million.

"The Moscow arbitration court ruled that the action of the bailiff was legal and the seizure of the Purneftegaz stake was made in accordance with the law," the Rosneft spokesman said.

He said Rosneft would appeal the ruling. The fate of the Purneftegaz stake is still in doubt.

The Purneftegaz shares were seized in June for debts owed by Rosneft to creditors including MAPO-Bank, owed 34.5 million rubles ($2 million), and Mestbank, owed 1.29 million rubles. Financial company KB Dialog-Optim had been empowered by the courts to sell the Purneftegaz stake. It did so Sept. 11, although the names of the buyers have not been made public.

The sale was later suspended by a temporary injunction of the prosecutor general.

Last week, Russia scrapped an ongoing sale of a controlling stake in Rosneft, blaming the economic crisis for a lack of bidders.

First Deputy Prime Minister Vladimir Bulgak said Thursday that the collapse of the ruble had been the last straw.

The plan to privatize a 75 percent-plus-one share in Rosneft has been delayed three times. The stake was initially offered for $2.1 billion plus $400 million in investment conditions. After a first sell-off failed in May, the government slashed its asking price to $1.65 billion, but a second auction in July also failed.