The noose tightened around oil company Yukos?s neck last month and bankruptcy loomed large only weeks before the trial of its former CEO Mikhail Khodorkovsky was due to start.
Standard & Poor?s struck the first blow by dramatically cutting Yukos?s credit rating five notches from BB?, one of Russia?s highest corporate ratings, to CCC. Moody?s followed suit the same day, cutting the company?s senior implied rating three notches from Ba1 to B1.
Yukos CFO Bruce Misamore admitted at a conference a week later that creditors were becoming increasingly nervous and that the company had received a ?Potential Event of Default? notice from a syndicate of banks that have lent it $1 billion.
Although the notice has no immediate impact on the company?s operation it shook already unsettled investors. The notice allows members of the syndicate to exercise rights over various bank accounts Yukos offered as security on its loan or sell on their commitment.
The market reacted, pushing Yukos shares down 9.4% the day after the publication of the notice to $11.10 a share, its lowest level in months.
?The spectre of a bankrupt Yukos is beginning to loom realistically large and speculation over the possibility has graduated from conspiracy theory towards mainstream belief,? says Roland Nash, vice-president of Renaissance Capital. ?However, we don?t think a Yukos in receivership is what the Kremlin is after ? rather it is looking to force an end to the whole affair before [president Vladimir] Putin?s second term is much under way.?
The conflict between Russia?s richest man and Putin becomes more public when Khodorkovsky goes on trial on May 15 for tax evasion and fraud. It is widely believed, though, that his real crime was to challenge Putin politically.