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. Last Updated: 07/27/2016

Creditor: Chernogorneft Sale Flawed




The battles being fought over the carcass of bankrupt oil major Sidanko took another contentious turn Friday, when a significant shareholder cried foul over the coming sale of a bankrupt Sidanko subsidiary, claiming it had been denied sufficient information to make a bid.


Officials at Sidanko production unit Chernogorneft said they had insufficient paper to supply the Sputnik Group with a full list of the subsidiary's assets being offered for sale, Sputnik spokesman Alexander Bogatyryov said.


As a result, Sputnik was unable to place a bid for Chernogorneft by Friday's deadline, he said.


"They told us [at Chernogorneft] that they do not have enough paper to photocopy the requested documents" Bogatyryov said. "Such actions are aimed at stopping firms not associated with the auction organizers to participate in the sell-off."


Sputnik, which says it indirectly controls 10 percent of Sidanko, is a shareholder in the Cyprus-registered Kantupan Holdings firm that holds a 40 percent stake in Sidanko. The oil major owns a 73 percent stake in Chernogorneft, which is due to be auctioned off next Friday.


Chernogorneft's external management denies claims that it discriminated against any of the eight firms that had expressed interest in bidding for the firm, said Kirill Nam, assistant to Chernogorneft external manager Alexander Gorshkov.


"We have a Xerox [photocopier], but it's old" Nam said. "The list of Chernogorneft assets is about 7,000 pages long, or four boxes of paper, and we are not legally obliged to give it away."


Nam said that the firm had provided all interested parties with those documents that bankruptcy legislation obliges them to distribute.


However, Sputnik Group president Boris Jordan - a former Sidanko chief executive - on Friday sent a protest letter to Prime Minister Vladimir Putin, asking him to annul the "discriminatory sale" of Chernogorneft.


"Sputnik did not have the chance to evaluate the assets and other terms of the sale," Jordan wrote to Putin.


"It seems the auction is being 'staged' to sell Chernogorneft to an insider, which has colluded with the external manager."


Meanwhile, Chernogorneft has registered three bids for next week's auction, Nam said. A starting price for the oil producer has been penciled in at $200 million, with a reserve price of $104.2 million.


Tyumen Oil Co., or TNK, confirmed that it had submitted a bid, Reuters reported. TNK subsidiary TNK-Nizhnevartovsk had earlier expressed official interest in placing a bid.


TNK - which last month succeeded in buying bankrupt Sidanko subsidiary Kondpetroleum at an auction - has been tussling with Sidanko management and multinational BP Amoco over several of the bankrupt firm's major assets.


BP Amoco holds a 10 percent stake in Sidanko. It has said it will consider pulling out of Russia altogether should Chernogorneft be sold to TNK.


Sidanko is already a shadow of its former self, having lost control of 75 percent of its oil production - which is now down to 100,000 barrels per day from 400,000 bpd last year, company officials said.


Sputnik has filed a protest with the prosecutor in Nizhnevartovsk - where Chernogorneft is based - over the tendering process, but has received no response, Bogatyryov said.


In addition to Sputnik and TNK-Nizhnevartovsk, Bashneft, Sidanko, Neftegaz, Neftyanoi bank and obscure oil firm Kuedinsk had been provided with the relevant information regarding the auction terms, Nam said.


The three bids filed had come from among those firms, he added.


BP Amoco has expressed dissatisfaction with the Chernogorneft bankruptcy process, saying that it still considers the firm to be a viable and profitable producer.


"We are not going to bid for Sidanko's property," Howard Chase, BP Amoco's spokesman in Moscow, said Friday.


He also dismissed allegations that the Sputnik Group is acting for BP Amoco.