Yukos Oil gets default notice from its syndicated lenders

By Jeff Pines

Washington, July 6 - Yukos Oil said it received a default notice on its $1 billion pre-export facility secured term loan from Societe Generale SA, the agent for the facility, after a Moscow court ruled against it on back taxes.

The notice stated that as a result of the default notice the loans are due and payable on demand by the facility agent.

The notice came after the Appeal Arbitration Court of Moscow decided in favor of a lower court's ruling that Yukos was liable for RUR 99.4 billion in back taxes. The decision means Yukos is prohibited from disposing of or encumbering its assets. There was also the announcement of a tax audit by the tax ministry in the amount of RUR 98 billion pertaining to 2001.

Yukos said it is considering its legal options but it intends, despite receipt of this notice, to continue its discussions with the lenders and take such actions as it deems appropriate and are within its power to ensure that all its obligations under the financing agreements are met.

Yukos chief financial officer Bruce Misamore said "Actions of representatives of the Russian government have led Russia's best and most creditworthy company to the brink of an unintended and artificial situation of insolvency and possible bankruptcy, creating an unthinkable default situation with its bank lenders, all at a time when the company is experiencing the best results in its history."

Societe Generale SA is coordinating bank, facility agent and a mandated lead arranger for the facility. Mandated lead arrangers for the facility are Citibank NA, Commerzbank AG, Credit Lyonnais SA, Deutsche Bank AG, HSBC Bank plc, ING Bank NV, KBC Bank NV, BNP Paribas, and UFJ Bank Nederland NV. Passport banks are JSC Bank Societe General Vostok (Moscow), Commerzbank (Eurasia) SAO (Moscow) and Credit Lyonnais Rusbank Societe Anonyme (Moscow).

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