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. Last Updated: 07/27/2016

Alfa Bank Sees Risk of State Attack

Mikhail Fridman's Alfa Bank said it might become a target for state acquisition or liquidation in view of developments surrounding Russneft, Yukos and Sakhalin-2.

In a note to investors that accompanied a $500 million Eurobond float offer, the bank said recent state takeovers of private companies was a risk factor that investors face in Russia.

A tax investigation into Yukos resulted in the imprisonment of its owner, Mikhail Khodorkovsky, and the sale of its assets, while both the government and Gazprom pressured Shell to relinquish its control of Sakhalin-2, the bank said in the memorandum, Vedomosti reported Wednesday. The bank said both Yukos and Sakhalin-2 put a question mark on the security of private property, the rights of investors and the independence of the courts in Russia. In addition, "they negatively reflected on investment in the Russian economy, especially in the oil and gas sector," it said.

Alfa Bank's owners have a stake in TNK-BP, which last week sold control of the Kovykta gas field to Gazprom after coming under state pressure.

The bank said it had cut back on its business dealings with Russneft, whose owner Mikhail Gutseryev is at the center of a tax investigation, but "there is no guarantee that either the bank or its clients will not become the next victim."

Alfa Bank extended a $420 million loan to Russneft in 2004 and a year later underwrote a 7 billion ruble, five-year bond for the company, Vedomosti said.