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RA in the FT

Robert Amsterdam is quoted in today’s Financial Times: FT: Nest of deals triggers ownership questions

In a deal inside a deal, reminiscent of Russian matryoshki or “nesting” dolls, US businessman Stephen Lynch has laid claim to ownership of the former Rosneft unit, Promneftstroi, that won the final lot of Yukos assets. They went under the hammer last week for $305m, in a lot that included the oil major’s Dutch subsidiary Yukos Finance BV. But amid complex legal wrangling in Dutch courts over control of the subsidiary, which holds an estimated $2bn-$2.5bn in Yukos’ foreign assets, people close to former Yukos management say Mr Lynch is nothing more than a “straw man” acting for much bigger interests. Mr Lynch’s tangled involvement in the final sale exemplifies a bankruptcy process that has been filled with smoke and mirrors. A number of foreign companies including Eni and Enel have participated in the auctions only to cede control to Russia’s state energy giants. Analysts and former Yukos managers say Mr Lynch looks likely to be continuing that practice by acting on the ultimate behalf of Rosneft, a charge that Mr Lynch denies. Rosneft denies any involvement in the sale. “This set of auctions is a constant test of how far they can push the envelope,” said Robert Amsterdam, an international defence lawyer for Mikhail Khodorkovsky, the former head of Yukos, who is serving a jail sentence for fraud and tax evasion. “Having a US buyer of these assets is one further test . . . If Mr Lynch wants to be part of it he assumes his own risks but the engineer is the same.” … Tim Osborne, managing director of GML, Yukos’ majority owner, says the involvement of foreign companies in the Yukos bankruptcy has made little difference in the end. “Our position has always been that our assets have been stolen by the Russian government. The fact that it was bankrupted doesn’t make it any more legitimate,” he says. “Yukos was destroyed unnecessarily and to the detriment of its shareholders.” Mr Osborne said GML was likely to raise between $28.3bn and $50bn – the amount it is currently suing the Russian government for in the Hague under the terms of the international energy charter for expropriation of its company. “The way the oil prices have gone we estimate the claim will be over $50bn by the time we’ve finished,” he says. Former Yukos vice-president Alexander Temerko echoes that claim. Mr Temerko says that if Yukos’ creditors committee had approved a debt restructuring plan forwarded by Yukos former management, the oil major could have been worth some $80bn by now. In fact its remains were sold off for little more than $30bn. Mr Temerko points out that Yukos debt levels and reserves at the time it was bankrupted were approximately the same as Rosneft’s now, which has racked up some $25bn in debt to fund its participation in the Yukos auctions and is now worth some $80bn. “This shows that politics has dominated this process,” Mr Temerko said. “This had nothing to do with economics or the law.”