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. Last Updated: 07/27/2016

Yukos Creditors Come to Town

Western banks chasing oil firm Yukos for $482 million of debt bring their global litigation threat to Moscow on Thursday when a court is due to decide whether to recognize their claim.

Banking sources said the lenders are asking Moscow Arbitration Court to recognize an earlier ruling made in their favor by the High Court in London.

If the court upholds the London ruling, creditor banks would join the line of claimants on Yukos assets in Russia, behind state oil firm Rosneft, which is poised to become the biggest creditor with claims worth $13 billion for unpaid taxes and lost profits.

That would also give the banks the right to start bankruptcy proceedings against Yukos in Russia, although banking sources said this was likely to be a last resort since it is unprofitable for banks.

If the court decided in the banks' favor Yukos would have 30 days to pay up, and the court could order asset seizures in the event of failure to pay. The state has already seized Yukos assets and frozen company bank accounts, leaving little for others.

Banks are seeking the outstanding $482 million portion of a $1 billion syndicated loan which was extended to Yukos in 2003 by a consortium including Citigroup, Deutsche Bank and Societe Generale.

Creditor banks began chasing Yukos in international courts after Rosneft refused to meet their demand for payment earlier this year.