Yukos's creditors voted on Tuesday for the stricken Russian oil firm to be declared bankrupt and rejected a plan proposed by its owners to prevent its demise. "It's deader than a doornail. There's going to be nothing left. It's going to be sold in pieces," said Eric Kraus, a fund manager at Moscow-based Nikitsky Russia Fund.
The creditors overwhelmingly backed a proposal by Yukos's court-appointed administrator, Eduard Rebgun, to ask a Russian court to put the firm into receivership at a hearing on August 1. "I consider that it is impossible to restore Yukos's solvency," Rebgun said at a meeting of the company's creditors.
"Yukos should be declared bankrupt and should go into receivership ... Creditors' total demands could not be satisfied by the sale of all the firm's property."
Tim Osborne, head of Yukos's main shareholder GML, called the creditors' decision "absurd" and challenged Rebgun's assessment of the company, which was felled by $33 billion in back-tax claims that were widely regarded as punitive.
"Yukos is solvent and can be restructured to maintain shareholders' investments," he told the creditors' meeting by teleconference from Britain. Rebgun says Yukos has liabilities of $18.3 billion but assets worth only $17.7 billion. But Yukos's owners say consultants Alvarez & Marsal have valued the assets at $37.7 billion.
Analysts believe state oil firm Rosneft, Yukos's second-largest creditor, will benefit most from the demise of what was once Russia's leading oil firm and largest company.
Rosneft, which bought Yukos's main production unit Yugansk after a forced auction in 2004, has denied playing a part in the bankruptcy. Its oil production boosted threefold by Yugansk, Rosneft has just raised $10.4 billion in Russia's largest stock market float.
Yukos said it was not surprised by the creditors' decision. After the creditors voted, Yukos's shares plunged by a third to a 12-month low of 13.5 roubles, valuing the firm at about $1.35 billion, about 97.5 percent off its September 2003 peak. Former Yukos Chief Executive Mikhail Khodorkovsky is serving eight years in jail for fraud and tax evasion.
His conviction last year was criticised as selective justice against an ambitious 'oligarch' who posed a political threat to President Vladimir Putin. Rebgun said the owners' survival plan was not legal and a Rosneft representative said it did not answer questions such as how and when the firm would pay off creditors.
The creditors elected a seven-member creditors' committee. Four will come from the Federal Tax Office, two from Rosneft and one from Yukos's Samaraneftegas subsidiary. They also agreed to back Rebgun's candidacy as the firm's receiver and to pay him 8.6 million roubles ($319,700) a month, if the court agrees. Yukos still owes the Federal Tax Office around $13 billion and about $2.8 billion to Rosneft.