Rosneft Will Pay Debts For Yukos

Rosneft Oil Company had finally decided to pay back the outstanding $473 million debt owed by Yukos Oil Company to a consortium of Western banks, Russian business daily Vedomosti said.

The debt was guaranteed by deliveries of crude from Yuganskneftegaz, a former Yukos core production unit that was bought by Rosneft at a forced auction in December 2004.

Yukos borrowed $1 billion from Western banks, including Societe Generale, Citigroup and Deutsche Bank, Commerzbank, Credit Lyonnais, HSBC, and ING, back in 2003 and put its key unit Yugansk?s oil exports as collateral. The embattled oil major stopped making credit payments in December 2004, after Yugansk was sold at a state auction.

In January 2005 the banks demanded that Rosneft, the new owner of Yuganskneftegaz, pay the remaining part of the $1 billion debt. At first Rosneft refused to make any payments, but the bankers warned the state company of court litigation and cross-default on Rosneft?s own loans.