- Baikalfinansgrup
Baikalfinansgrup ( _ru. Байкалфинансгруп) is a Russian limited liability company owned by Rosneft Oil Company. It is best known as the company that won the
December 19 ,2004 auction for a 76.79% share inYuganskneftegaz , formerly the core production subsidiary of Yukos Oil Company. Baikalfinansgrup won the auction with a bid of 261 billion rubles (US $9.3 bn), which was somewhere between 37-49% of Yuganskneftegaz’ market value at the time, according to an appraisal made byDresdner Kleinwort Wasserstein andJPMorgan Chase & Co. [http://www.msnbc.msn.com/id/6726341/] .Profile
Baikalfinansgrup was created on
December 6 ,2004 , just two weeks before the Yuganskneftegaz auction, with a share capital of 10,000 rubles ($358 US). Its original registered address was in the north-western Russian city ofTver in a building that houses a vodka bar, a mobile phone shop, a tour operator agency and the offices of several small local companies, but no office of Baikalfinansgrup. Baykalfinansgrup later moved its legal address to the head office of Rosneft Oil Company, which is situated on Sofiyskaya Embankment directly opposite the Kremlin.Despite its obscurity, Baikalfinansgrup was able to secure a credit of US $1.7 bn from the state-owned
Sberbank savings bank as a down-payment for participating in the auction.On
December 21 2004 , Russian presidentVladimir Putin admitted that he knew the owners of Baikalfinansgrup. Putin did not disclose their names but noted that they were individuals with ‘many years of experience in the energy business’.Yuganskneftegaz auction
Yuganskneftegaz was the core production subsidiary of Yukos Oil Company, which was previously run by Russian businessman
Mikhail Khodorkovsky . In 2003, the Russian tax authorities charged Yukos and Khodorkovsky with large-scale tax evasion. OnApril 14 ,2004 , Yukos was presented with a bill for over US $3.5 bn in back taxes and a demand to pay the entire bill the same day. Requests by Yukos to defer payment, allow payment by instalments or to discharge the debt by sale of peripheral assets, including its shareholding in theSibneft oil company, were also refused. Since Yukos was both legally and physically unable to pay the entire amount in cash on such short notice, Russian bailiffs froze Yukos’ shares in Yuganskneftegaz.On
November 19 ,2004 , Russian bailiffs placed a notice in the Russian government newspaper "Rossiyskaya gazeta " announcing that Yuganskneftegaz would be sold at an auctioned scheduled to be held 30 days later onDecember 19 ,2004 [http://www.rg.ru/2004/11/19/uganskneftegaz-dok.html] . The conditions for participation in the auction included an advance deposit of US $1.7 bn and prior clearance by the RussianFederal Antimonopoly Service .In early December, the Russian state-controlled gas monopoly
Gazprom submitted an application to participate in the auction through its wholly owned subsidiary,Gazpromneft .Gazpromneft had been created in September 2004 in preparation for a planned merger betweenGazprom and state-ownedRosneft .On
December 15 2004 , Yukos filed for a bankruptcy protection in aHouston court, and obtained a temporary injunction prohibitingGazprom from participating in the auction. On the next day,December 16 , a group of Western banks withdrew their financial support for theGazprom application. On the same day, the previously unknown Baikalfinansgrup applied to participate in the auction.On
December 19 2004 , only two companies appeared for the auction:Gazpromneft and Baikalfinansgrup.Gazpromneft declined to place any offer, thus allowing Baikalfinansgrup to acquire Yuganskneftegaz on its first bid.Four days later Baikalfinansgrup was acquired by Rosneft. Rosneft later disclosed it its annual financial statement that it had financed the acquisition of Yuganskneftegaz [http://www.rosneft.com/english/company/GAAP2004_english.pdf] . At the time, Rosneft president
Sergey Bogdanchikov was also the CEO ofGazpromneft [http://www.kommersant.com/page.asp?idr=500&id=-2970] .Shortly after the auction, the planned merger between Gazprom and Rosneft merger was called off, and Sergey Bogdanchikov resigned his post as CEO of Gazpromneft.
On
February 7 ,2006 , in response to a question by a Spanish journalist, Russian PresidentVladimir Putin disclosed that Rosneft had used Baikalfinansgrup as a vehicle to acquireYuganskneftegaz in order to protect itself against litigation risks [http://www.kremlin.ru/appears/2006/02/07/1759_type63379_101129.shtml] .External links
* [http://www.rosneft.com/ Rosneft site - English language]
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