By OGJ editors
HOUSTON, Nov. 19 -- The Russian government announced bidding has opened for a Dec. 19 auction of a subsidiary of OAO Yukos in the company's prolonged, highly publicized battle over alleged delinquent taxes.
The auction of 76.79% of Yuganskneftegaz is open to international companies, and the Russian government requires a $1.7 billion deposit in order to bid. Bidding opened Friday with a minimum price of $8.6 billion. Yukos claims the subsidiary's value is $20 billion.
The stake will be sold in one lot, government officials have said.
St. Petersburg, Fla.-based Raymond James & Associates Inc. said that an independent appraisal for the Russian government by a German investment banker listed the minimum value at $10.4 billion and the fair value at $14-17 billion.
"The state-owned natural gas producer Gazprom is widely seen as the front-runner for acquiring the assets," said RJA analyst John Tysseland of Houston.
Yukos CEO Steven Theede called the expropriation "a mockery of the protection of private property."
"The sale is clearly illegal under Russian law, which states that non-core assets are to be disposed of first in tax settlement cases," Theede said. "Yuganskneftegas is the heart of Yukos, and its sale will lead to the destruction of the most efficient Russian oil company, and the one that has attracted the most western investment."
For months, the Russian government has not allowed Yukos to access its bank accounts and has continued to collect money from the company's monthly revenues, he said.
Yukos continues to dispute the amount and basis for the tax charges, penalties, and interest. Meanwhile, the Russian government has said the company's tax debts could be as much as $24.5 billion.