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Yukos told its accounts are not frozen

/ Source: The Associated Press

Yukos announced Wednesday that Russian authorities have told the beleagured oil giant that its bank accounts are not frozen, giving it access to cash in a major decision the company said would help it stay afloat and make good on the massive back-tax bills it faces.

The Justice Ministry's bailiffs service told the oil giant that it can use its accounts to make monthly payments to cover current operations "as the accounts of Yukos in credit organizations are not blocked," the company said in a brief statement on its Web site.

Yukos managers had been warning that unless the company gained access to accounts it said were frozen around the beginning of July, it could be forced to halt operations and would be driven out of business.

"We welcome the decision of the Justice Ministry," the Yukos statement quoted chief financial officer Bruce Misamore as saying. He said it would allow Yukos to make uninterrupted payments of current taxes, as well as payments on its $3.4 billion back-tax bill for 2000, and to "continue financing production activities."

"This, no doubt, is good news for our several hundred thousand workers and their family members," he said.

Late last month, CEO Steven Theede said restricted access to cash meant that Yukos might be unable to fund its operating expenses and pay bills sometime in the first half of August.

Citing an unidentified source at Yukos, the Interfax news agency reported that the Justice Ministry told the company that bailiffs had removed all assets from the accounts last month — which is when they were reported frozen — but would not remove money that is in the accounts now or is placed in them in the future.

According to Interfax, the Justice Ministry told Yukos that "an arrest cannot be placed on the accounts themselves" or on money entering them in the future.

In addition to the 2000 bill, Yukos faces a similar claim for 2001 and tax authorities are investigating its 2002 activities.

The mounting tax claims, along with the trial of former CEO Mikhail Khodorkovsky, are part of a web of actions by the Russian state that many observers say are part of a campaign to punish the billionaire for his growing clout and may be aimed to put at least part of the company — Russia's largest oil producer — in Kremlin-friendly hands.

Yukos has said that it does not have sufficient funds to pay the back-tax claims and has made repeated requests to the government to spread out payments.

But while the government has not publicly responded to those requests, Misamore said Wednesday that the Justice Ministry decision meant Yukos could make payments on the 2000 bill. It was unclear whether he meant the company might be able to pay the bill by the end of the month, as the head of the bailiffs service recently said it must.

Yukos has also repeatedly complained about a court order freezing its assets, which has made it impossible for Yukos to raise funds by selling off peripheral units.

Yukos has offered to sell its controlling interest in a gas joint venture with the Anglo-Russian oil company TNK-BP to help settle the bill, and the ITAR-Tass news agency reported that the sale would raise $357 million toward the $3.4 billion claim.

TNK-BP confirmed that the company had accepted the offer to buy out Yukos' 56 percent stake in Rospan International. It said that the sale would be legal because Yukos' stake belongs to an offshore subsidiary and therefore is not part of Yukos' Russian assets, which remain frozen under a court order.

A Yukos spokesman said the company had sent a letter to the government requesting permission for the sale and was awaiting a response.

In a letter to bailiffs, Yukos lawyers said the money from the sale could be transferred to the bailiffs service by the end of August, ITAR-Tass reported.