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. Last Updated: 07/27/2016

Sidanko Heads To Bankruptcy Court

After seeing one after another of its subsidiaries forced into insolvency in recent months, Russian oil major Sidanko itself will now face bankruptcy proceedings.

A Sidanko creditor company called Beta-Eko filed suit Thursday in a Moscow region arbitration court to push the large oil company into bankruptcy.

In a news release, Sidanko said it had "always recognized its obligations before all creditors" and blamed its financial difficulties on the falling price of oil and on government restrictions on the company's export quotas.

The government's requirement to supply the Angarsk refinery with oil under "unprofitable conditions" was another factor in Sidanko's problems, the release said.

A spokesman for BP Amoco, which bought a 10 percent stake in Sidanko nearly two years ago, said in a statement that the bankruptcy proceedings should not be viewed as a liquidation, but more as "analogous to Chapter 11 proceedings" in the United States.

"An administrator is expected to be appointed," the statement said. "He will run the company and will be expected to put forward a plan to a creditors' committee for the restructuring and recapitalization of the company. ... We believe that the company is viable in the long term, even with oil prices as low as they are."

Sidanko, part of Vladimir Potanin's Interros financial-industrial group, has run into serious trouble of late, with its Angarsk refinery near Irkutsk and its western Siberian production units Kondpetroleum and Chernogorneft all currently in bankruptcy.

Bankruptcy proceedings were begun this week against a third production unit, Udmurtneft.

Nothing is known about Beta-Eko, the company that filed the suit. Sidanko spokesman Oleg Sapozhnikov said he knew nothing about the company "or the interests behind it."

He said he did not know how much money Sidanko owes Beta-Eko, and that the amount was not listed in the court papers filed Thursday.

There has been much speculation of late that the bankruptcy of the daughter companies was the result of an attack by one or another financial interest.

In particular, there have been allegations that the Tyumen Oil Co., controlled by Pyotr Aven's Alfa financial-industrial group, may have been involved in initiating the Chernogorneft bankruptcy in order to take over the unit.

Analysts said, however, that in the case of the Sidanko bankruptcy, the matter was far more likely to be something initiated from within the Interros group itself.

"I definitely think this is something being done by [Interros]" said one oil analyst who did not want to be quoted by name.

An industry insider with ties to Sidanko said he believed the company had transferred title to its assets to off-shore holding companies.

If this is true, Sidanko would be left as a bankrupt shell company stripped of all of its assets and left only with debts.

Sidanko's Sapozhnikov said he had "no knowledge" of any transfer of shares and dismissed the idea as "rumors that are just wrong."

Interros spokeswoman Larisa Zelkova likewise denied the bankruptcy had been initiated by the holding company, saying that Beta-Eko had no connection whatsoever with Interros.

The spokeswoman also could not provide any details about the Beta-Eko company.