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. Last Updated: 07/27/2016

Obscure Firm Wins Yukos Power Sale

ReutersJournalists reporting from the auction of Yukos assets Tuesday. Monte-Valle won the auction with a $138 million bid.
An obscure firm named Monte-Valle picked up Yukos electricity assets at the dismantled oil company's latest bankruptcy auction on Tuesday, beating out Rosneft and two unknown contenders.

Monte-Valle paid 3.56 billion rubles ($138.3 million) for the lot -- some 35 percent higher than the starting price of 2.64 billion rubles ($102.5 million), but still below the assets' market value.

The auction was the third in a series of sales that will draw the final curtain on Yukos, as a court-appointed bankruptcy receiver sells off its remaining assets to pay off its debt. State energy giants Rosneft and Gazprom are expected to win most of the auctions, which analysts say are highly choreographed.

The receiver's spokesman, Nikolai Lashkevich, declined to comment on who was behind Monte-Valle. "We're not interested in who the company is. We care only that it fulfilled its responsibilities by being registered, that all paperwork is in order and that it will pay," he said by telephone after the auction.

According to the Prime-Tass news agency, the Moscow-registered firm was opened in August 2003 by an American named Steven Patrick Lynch.

Monte-Valle beat out Neft-Aktiv, a second-tier subsidiary of Rosneft, and two unknown bidders, Versar and Finansovoye Agentstvo, to snatch up the lot of power assets.

"While we do have a strong interest in these sorts of assets, we weren't ready to pay a very high price for something that won't bring us profits," Rosneft spokesman Nikolai Manvelov said.

Versar quit the auction after just one bid, leaving Neft-Aktiv and Finansovoye Agentstvo to battle it out with Monte-Valle until nearly the end, with Neft-Aktiv dropping out after the bidding passed 3 billion rubles. News agencies said the bidding appeared dramatic, with 35 bids coming in less than 10 minutes.

The lot comprised 10 Yukos power assets located in the Tambov and Belgorod regions, including a 3.18 percent stake in generating company TGK-4, 25 percent stakes in distribution companies Tambovenergo and Belgorodenergo and stakes in several electricity networks.

"They sold it lower than the market price, but the market price is tricky here because the assets are rather illiquid," said Dmitry Bulgakov, a utilities analyst at Deutsche Bank.

Gazprom, which has been increasing its stake in the electricity sector, was seen as the winner of the previous Yukos auction held earlier this month. The gas giant signed a call option with Eni and Enel before the Italian consortium won the lot, which included Yukos' 20 percent stake in Gazprom Neft and two gas production units.

Gazprom spokesman Sergei Kupriyanov said the company did not take part in Tuesday's auction and was not affiliated with any of the bidders.

Bulgakov, the utilities analyst, said Tuesday's lot did not fit well with either Rosneft or Gazprom's portfolios. "Gazprom is looking for thermal generation," he said, while "Rosneft does not have production facilities in the region."