Bloomberg News

U.K. High Court May Rule Against Rosneft Listing

July 13, 2006

The U.K. High Court may rule against OAO Rosneft's listing of shares on the London Stock Exchange after OAO Yukos Oil Co. challenged the Financial Services Authority for allowing the initial public offering to proceed.

Yukos is seeking a court order to block Rosneft share-trading in London, the LSE said today in a Regulatory News Service statement. A decision favorable to Yukos would annul any trading of Rosneft shares, scheduled to start tomorrow, by July 19, the LSE said.

``We are aware an application has been launched and working with other parties to ensure that this is dealt with speedily,'' said David Cliffe, a spokesman for the FSA in London. He declined to comment on the specifics of the Yukos claim. The Yukos suit ``won't affect the IPO,'' said Nikolai Manvelov, a Rosneft spokesman.

A preliminary hearing to determine whether the case can proceed will begin tomorrow, Yukos spokeswoman Claire Davidson said today in a telephone interview.

Rosneft, which is seeking to raise as much as $11.6 billion in the IPO, acquired Yukos's largest production unit 1 1/2 years ago. Yuganskneftegaz was ``expropriated from Yukos by actions of the Russian state in proceedings which were contrary to Russian law,'' Yukos had written in a 33-page complaint sent to the FSA last month.

Tax Claims

An LSE spokeswoman confirmed that Yukos is seeking to block the IPO.

State-owned Rosneft bought Yugansk after the Russian government seized and sold it to pay Yukos tax claims. Creditors, including Rosneft and the tax authorities, are seeking more than $20 billion from the company, once led by Mikhail Khodorkovsky.

Rosneft doesn't expect any ``significant damage'' from court cases resulting from the dismantling of Yukos, Chief Executive Officer Sergei Bogdanchikov told investors June 26. The company can rely on the government's ``moral support,'' he said.

ABN Amro Rothschild, Dresdner Kleinwort, JPMorgan Chase & Co., Morgan Stanley and OAO Sberbank are managing the share sale.

To contact the reporters on this story: Elisa Martinuzzi in Milan at emartinuzzi@bloomberg.net; Nandini Sukumar in London at nsukumar@bloomberg.net

To contact the editors for this story: Frank Connelly fconnelly@bloomberg.net; Katherine Snyder at ksnyder@bloomberg.net


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