July 28th, 2004

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Stratfor on YUKOS

Stratfor
An Offer to Foot the Yukos Bill July 23, 2004

Summary

A shadowy group of business people in London offered to "solve" the financial troubles of Russian oil giant Yukos on July 23. The Russian government is not about to let that happen.

Analysis

On July 23, a group of investors based out of London submitted an offer to the embattled Russian oil firm Yukos: $8 billion to $10 billion in cash -- enough to pay all of the firm's back taxes -- in exchange for the shares held by former Yukos CEO Mikhail Khodorkovsky and control of the company.
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It will not work.

Putin views the oligarchs in general -- and Khodorkovsky in particular -- as a threat to both his power and his vision of Russia's future. Khodorkovsky had his chance to cut a deal a year ago; it is far past the time that he can buy his way out of his hubris. The government froze Yukos shares months ago so they cannot be "sold" in the manner that the "investors from London" are recommending without explicit government approval.

Putin will see Khodorkovsky safely to prison -- and Yukos safely to the chopping block.


Looks like Western analysts finally grasped Russian realities. Last two days on Russian stock market proved them correct. YUKOS stock is falling down with maximum speed possible.

On other hand, that development will not harm Russian economy more than it is already harmed. Because all western investors that could panic took their assets out long ago.