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. Last Updated: 07/27/2016

Sidanko Can't Stop Chernogorneft Sale




Embattled and insolvent oil major Sidanko tried and failed on Friday to halt the seemingly inexorable split with its bankrupt production subsidiary Chernogorneft, which is now set to be sold off before the end of this year.


Sidanko supported a participant at Friday's Chernogorneft creditors meeting who declared that the assembly was illegal and should therefore be canceled, Sidanko officials said.


When the other creditors disagreed and signaled their determination to go ahead with the meeting, representatives from Sidanko and its allies stormed out.


The remaining Chernogorneft creditors - holding some 65 percent of the votes on the creditors committee - then continued with the meeting, voting to approve an external management program that calls for the oil producer to be sold in the fourth quarter of 1999.


Under that plan the sale can go ahead under the external manager's supervision, without any need for further approval from the creditors committee, even though no price has been set for Chernogorneft, Sidanko representatives said.


That decision was strongly opposed by the chairman of the creditors committee, Boris Volkov, a former Sidanko president. He also left the gathering.


With Sidanko absent, it became impossible for the creditors still attending to evaluate an amicable settlement for Chernogorneft that had been put forward by Sidanko. The creditors had wanted to grill Sidanko concerning both the agreement itself and the involvement of Sobinbank in that amicable settlement plan as an agent for repaying creditors' claims, according to a source close to the meeting's participants.


Chernogorneft's creditors split into two camps after Tyumen Oil Co., or TNK, declared earlier this year its desire to buy Chernogorneft away from Sidanko. Friday represented another step forward for TNK, which had most recently said that it had only managed to gather backing from 60 percent of creditors' votes.


Chernogorneft, which produced 6.2 million tons of crude oil last year, is a vital part of the Sidanko oil holding, Russia's sixth-largest oil company by production.


Sidanko, which is itself going through bankruptcy proceedings, is seen as a major test case for foreign investment in Russia's oil industry because of BP Amoco's 10 percent stake in Sidanko. BP Amoco has played a leading role in trying to prevent Sidanko from splitting up.


Meanwhile, TNK has been just as determined to hive off Chernogorneft from Sidanko, claiming that it could run the oil production unit better than Sidanko.


Sidanko's claim that the meeting was illegal was based on an injunction issued by the Solntsevsky municipal court in the Moscow region and produced by a creditor attending the meeting. That court order ruled that no Chernogorneft creditors meeting could proceed until a claim regarding the transfer of an unpaid Chernogorneft debt could be resolved, said a high-ranking Sidanko official who declined to be identified.


After representatives from Sidanko and other allied creditors had received a copy of the ruling, they left the meeting in order to avoid violating the injunction.


However, Sidanko's rivals responded by saying that the municipal court does not have the legal right to ban a creditors meeting - only an arbitration court has jurisdiction over creditors meetings.


Sidanko will launch a court appeal contesting Friday's creditors meeting, officials said.


Meanwhile, before leaving that meeting they filed a protest over the plan put forward by Chernogorneft external administrator Alexander Gorshkov.


"Gorshkov's plan has only one option - to sell the business," Sidanko's external manager, Stanislav Yegorushkov, told The Moscow Times on Thursday. The Chernogorneft external management program violates creditors rights, he added.


Meanwhile, the EBRD again had the level of Chernogorneft's debts to it arbitrarily written down, according to Sidanko officials.