Menatep Bank announced Thursday that it plans to buy a majority stake in the giant oil company Yukos at an auction the bank itself will manage next month as part of the government's loans-for-shares program.
Menatep, the only bank registered for the bid so far, is supremely confident that it will win. "There should be no two opinions about this," Konstantin Kagalovsky, Menatep's first deputy chairman, said in an interview. "We will get Yukos."
The fact that Menatep is in the unusual position of being responsible for taking bids and registering participants as the government's representative gave credence to his remark.
A Western analyst, commenting on Menatep's role in the auction, said the rules set up by the government for the loans-for-shares program "are far from ideal. They have a lot of shortcomings. Menatep is out to make a profit and is trying to take advantage of these shortcomings."
The analyst, who spoke on condition of anonymity, added: "It is up to the government to set the rules. If people are unhappy, they should press the government to change these rules."
Menatep, Russia's 10th-biggest bank, made its investor, and receive enough resources for the company's development," said Viktor Ivanenko, first vice president of Yukos. "We need a committed long-term partner."
This week the pension fund of another oil major, Surgutneftegaz, was confirmed as the winner of last Friday's auction of 40 percent of the parent company in the first such auction under the loans-for-shares scheme. Commenting on the result, the head of the State Property Committee, Alfred Kokh, said: "The worst forecasts did not come true. Foreigners did not buy Surgutneftegaz. Everything went as planned."
Yukos, a new vertically integrated oil company, is to be sold at a double auction reserved for Russian bidders Dec. 8. The government is offering 45 percent of Yukos shares for a starting price of $150 million under the loans-for-shares scheme, and an additional 33 percent in a straight cash sale for a starting price of $350 million.Bidders have to participate in both auctions.
Registration must be completed by Dec. 5 and each bidder has to deposit $350 million into a Finance Ministry account before the auction.
Menatep officials said they expect several other bidders to participate, but discounted them as not being serious competitors. "We are talking about half a billion dollars, and we are ready to provide this amount," said the bank's Kagalovsky. "What about the others?"
Kagalovsky warned against foreigners trying to bid for Yukos shares through a front organization. "The law is very strict on this issue," he said. "If some foreigner decides to deceive our government, it risks losing everything. Under government regulations, if the investigation proves that the money came from a foreign source, it will be confiscated into the state budget."
Menatep has been courting Yukos for some time. It first made public its interest in August. Yukos played coy, stating, as now, that there were other suitors in the wings.
If Menatep succeeds, it will not be a short-lived relationship, the bank now says. Kagalovsky says it intends to hold a controlling interest in Yukos for 10 years.
Craig Kennedy, Moscow representative of Cambridge Energy Research Associates, cast doubts upon the wisdom of Menatep making its confidence so public.
"It's clear that the couple wants to get together, and that they have not been able to legally arrange their marriage yet," he said. "But whether they will be able to complete the deal is not yet certain."
Kennedy thought that there could be problems coming from "several centers of authority within the government," and there could be more Russian bidders. He also said "it is entirely possible" that foreign companies may use Russian front companies to bid for Yukos. "There is still a possibility that Yukos will receive a better offer."
Controversy already surrounds the Yukos sell-off. An announcement in the government newspaper Rossiiskaya Gazeta giving the terms of the auction was disowned last week by the State Property Committee as only Yukos' proposal. The committee said the auction would not take place.
In fact, the terms have largely been confirmed. With minor changes, they were subsequently republished in Reforma, the official bulletin of the Russian Federal Property Foundation.
Menatep, the only bank registered for the bid so far, is supremely confident that it will win. "There should be no two opinions about this," Konstantin Kagalovsky, Menatep's first deputy chairman, said in an interview. "We will get Yukos."
The fact that Menatep is in the unusual position of being responsible for taking bids and registering participants as the government's representative gave credence to his remark.
A Western analyst, commenting on Menatep's role in the auction, said the rules set up by the government for the loans-for-shares program "are far from ideal. They have a lot of shortcomings. Menatep is out to make a profit and is trying to take advantage of these shortcomings."
The analyst, who spoke on condition of anonymity, added: "It is up to the government to set the rules. If people are unhappy, they should press the government to change these rules."
Menatep, Russia's 10th-biggest bank, made its investor, and receive enough resources for the company's development," said Viktor Ivanenko, first vice president of Yukos. "We need a committed long-term partner."
This week the pension fund of another oil major, Surgutneftegaz, was confirmed as the winner of last Friday's auction of 40 percent of the parent company in the first such auction under the loans-for-shares scheme. Commenting on the result, the head of the State Property Committee, Alfred Kokh, said: "The worst forecasts did not come true. Foreigners did not buy Surgutneftegaz. Everything went as planned."
Yukos, a new vertically integrated oil company, is to be sold at a double auction reserved for Russian bidders Dec. 8. The government is offering 45 percent of Yukos shares for a starting price of $150 million under the loans-for-shares scheme, and an additional 33 percent in a straight cash sale for a starting price of $350 million.Bidders have to participate in both auctions.
Registration must be completed by Dec. 5 and each bidder has to deposit $350 million into a Finance Ministry account before the auction.
Menatep officials said they expect several other bidders to participate, but discounted them as not being serious competitors. "We are talking about half a billion dollars, and we are ready to provide this amount," said the bank's Kagalovsky. "What about the others?"
Kagalovsky warned against foreigners trying to bid for Yukos shares through a front organization. "The law is very strict on this issue," he said. "If some foreigner decides to deceive our government, it risks losing everything. Under government regulations, if the investigation proves that the money came from a foreign source, it will be confiscated into the state budget."
Menatep has been courting Yukos for some time. It first made public its interest in August. Yukos played coy, stating, as now, that there were other suitors in the wings.
If Menatep succeeds, it will not be a short-lived relationship, the bank now says. Kagalovsky says it intends to hold a controlling interest in Yukos for 10 years.
Craig Kennedy, Moscow representative of Cambridge Energy Research Associates, cast doubts upon the wisdom of Menatep making its confidence so public.
"It's clear that the couple wants to get together, and that they have not been able to legally arrange their marriage yet," he said. "But whether they will be able to complete the deal is not yet certain."
Kennedy thought that there could be problems coming from "several centers of authority within the government," and there could be more Russian bidders. He also said "it is entirely possible" that foreign companies may use Russian front companies to bid for Yukos. "There is still a possibility that Yukos will receive a better offer."
Controversy already surrounds the Yukos sell-off. An announcement in the government newspaper Rossiiskaya Gazeta giving the terms of the auction was disowned last week by the State Property Committee as only Yukos' proposal. The committee said the auction would not take place.
In fact, the terms have largely been confirmed. With minor changes, they were subsequently republished in Reforma, the official bulletin of the Russian Federal Property Foundation.
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