level government source, Interfax also reported that a company affiliated with the state-connected gas giant Gazprom would probably be a bidder. This in conjunction with the reported fire sale price, "implies confiscatory nationalization," the UFG brokerage wrote in a note Friday. On Wednesday, the Russian Justice Ministry had said it would proceed with the sale of Yuganskneftegaz using a figure of US$10.4 billion (¤8.4 billion), which was the lowest possible value included in the independent assessment by investment bank Dresdner Kleinwort Wasserstein. The bank described that value as "overly conservative." Yukos CEO Steven Theede said in a statement late Thursday that the bailiffs were breaking the law by selling off the embattled oil giant's core subsidiary, and questioned the selection of the lower value. "Initial analysis of the report indicates that there are many possible valuations of our subsidiary, while Russian government officials have given out an unequivocal valuation of US$10.4 billion," Theede said. He noted that the choice of the Yuganskneftegaz sale ran counter to Russian law, which prohibits selling a company's core assets when there are other routes for settling debt. Yukos is struggling to pay down some US$7 billion (¤5.6 billion) in back tax claims for 2000-2001. While it has paid down the bulk of its US$3.4 billion (¤2.7 billion) bill for 2000, Russia's biggest oil company faces a cash-crunch: a court order prohibits it from selling assets to raise cash, while bailiffs have frozen bank accounts at its head office and subsidiaries. Russian President Vladimir Putin has insisted that the yearlong legal assault on the company and its jailed ex-CEO Mikhail Khodorkovsky is a crackdown on shady business practices, but observers see the company's troubles as the result of Khodorkovsky's perceived political ambitions.
