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. Last Updated: 07/27/2016

Court Rejects Yukos' Appeals About Tax Claim

APFormer Yukos CEO Mikhail Khodorkovsky being led to court. On Tuesday the prosecution finished giving evidence in his trial.
Yukos suffered a double blow Tuesday when the Moscow Arbitration Court rejected attempts by the oil major to cover part of a $3.4 billion bill in back taxes and postpone collection of the claim.

The battered oil company, which has warned of imminent bankruptcy, lost an appeal to use its 20 percent stake in Sibneft as collateral for the tax bill.

In a separate ruling, the arbitration court rejected a petition to suspend collection of the bill.

The one crumb of good news for Yukos on Tuesday was a report that it had sold its stake in Siberian gas producer Rospan International to TNK-BP for $357 million, money that could go toward paying off the tax bill.

After a plethora of conflicting decisions on the fate of Yukos, investors are watching for any indication of what the authorities intend to do with the company, which is facing the forced sale of its main production unit, Yuganskneftegaz, to settle the tax claim.

Yukos last month offered its 35 percent stake in Sibneft as collateral for the tax bill. But Yukos, which gained the stake as part of an ill-fated merger with Sibneft, said court marshals ignored the offer.

"This shows it isn't about the money. It's about the assets," said Christopher Weafer, chief strategist at Alfa Bank. "If Yukos were allowed to use its Sibneft stake, the company could clear the tax bill by the deadline, and that would leave the government in a very difficult position in relation to the main aim -- taking Yuganskneftegaz away."

In July, the Chukotka Arbitration Court froze a 15 percent stake in Sibneft held by Yukos, leaving the company with only 20 percent, which is worth $2.46 billion at current prices.

The merger between Yukos and Sibneft, which is controlled by Chukotka Governor Roman Abramovich, was called off last year.

In another ruling Tuesday, the Moscow Arbitration Court rejected a Yukos petition asking for the suspension of the tax bill until appeals are heard on the seizure of main production units.

Officials from the Federal Tax Service said in court that Yukos had paid 22.92 billion rubles ($784.5 million), or less than a quarter of the $3.4 billion claim, Interfax reported.

Yukos may be able to increase its tax payments after selling its stake in Rospan to TNK-BP, Reuters reported, citing unidentified people.

"[The sale] gives some glimmer of hope that the bailiffs may be reasonable and allow the company to sell noncore assets to service its tax debts," said Paul Collison, oil and gas analyst at Brunswick UBS. "But if you put it in context, it is very small compared to the tax bill."

Alfa Service, a little-known Russian company that had stated its interest in the Rospan stake, said it would try to halt the sale.

"If it has taken place, we think it is illegal and will oppose the sale in the courts," said Vladimir Semyonov, executive director at Alfa Service.

Alfa Service, which trades oil and oil products, is not linked to Alfa Group.

In related news, Interfax reported that tax authorities are probing Yuganskneftegaz, which accounts for nearly two-thirds of Yukos' output, for its 2002 payments.

"This could lower the potential valuation of Yuganskneftegaz," said Sergei Suverov, head of equity research at Bank Zenit. "And that means the price could be cheaper, making it easier for a purchaser to buy."

On Thursday the Justice Ministry announced that Dresdner Kleinwort Wasserstein would value Yuganskneftegaz, lifting hopes among investors that it would not be sold off at a fire-sale price.

Yukos declined to comment, and the Justice Ministry was unavailable for comment on Tuesday.

 A Moscow court finished hearing the 400 volumes of prosecution evidence in the trial of Mikhail Khodorkovsky and Platon Lebedev on Tuesday, Reuters reported.