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Joint Aversion
// BP demands $352 mln from Russian TNK-BP shareholders
The owners of TNK-BP had to appeal to the British court in a bid to settle their joint-stock dispute. BP, which has control of half of the oil company, has turned to the High Court in London demanding that its Russian partners, the AAR consortium, pay $352 mln as a compensation for TNK-BP’s extra taxes. It’s the first time BP files a suit against its Russian partners. AAR disagrees with the claims considering that it owes only $50 mln to the British.
The Wall Street Journal reports that last week BP appealed to the High Court requiring to exact $360 mln from the AAR consortium. It’s the first suit of BP against AAR since TNK-BP was set up. Only Russian shareholders have appealed to court since a conflict broke out at the beginning of the year.
Those in BP and AAR confirmed it to Kommersant that the suit has been brought, and specified that the sum of the action is 8.5 bln roubles ($352 mln). It is the money TNK-BP paid in the form of taxes that were levied on TNK before it set up a joint venture with the British company. BP reminds that the agreement concluded when TNK-BP was created envisages a mechanism of protecting shareholders against financial damages in case TNK-BP bodies are made to pay taxes for the periods prior to 2003. If one of the companies is levied extra taxes on, the shareholder that was in control of that company before 2003 (AAR in this case) must compensate for the lost profits to its partner. In BP they assured us that they have asked AAR three times to give back the 8.5 bln roubles, and the current suit has nothing to do with the conflict in TNK-BP.
AAR replied that it has paid BP some $500 mln in the framework of their joint-stock agreement. AAR won’t agree to pay the sum BP demands because it regards it too high, and it will dispute the sum, according to AAR’s chief executive Stan Polovets.
TNK-BP shareholders are virtually on the brink of war. The disagreement between them concerns the company’s development strategy. AAR (Leonard Blavatnik, Victor Vexelberg, Mikhail Fridman, German Khan) wants to hold TNK-BP’s IPO, develop it in international markets and is seeking parity in controlling its key affiliate – the TNK-BP holding. The British are reluctant to change the existing structure.
“AAR regards the suit another example of BP’s aggressive tactics. Its unwillingness to address the disputes between the shareholders is one of the main causes of today’s conflict,” he stated.
A source of Kommersant with the AAR shareholders says that the company renders a compensation of $50 mln fair. According to him, BP owes only $60 mln to AAR, because the British at first got a compensation for the extra taxes, but then the sum of the claim to BP was decreased by a court verdict. Besides, 5.9 bln roubles out of the 8.5 bln roubles is the extra taxes laid on the TNK-BP bodies, which hasn’t been paid yet. Consequently, BP can’t demand any compensation. The source of Kommersant says that late July the period when TNK-BP shareholders can require from each other compensation for the taxes imposed before 2003, expires. “They must heave decided to make the most of it,” he believes. According to him, BP has never compensated for anything, although it also was to make up for the lost profits.
Analyst with the Solid investment company Denis Borissov opines that the British’s appealing to court can be viewed as continuation of the conflict between the TNK-BP shareholders. Valery Nesterov from Troika Dialog reminds that so far Russian shareholders have launched attacks against BP, and the present action can be rendered a counterattack.
Denis Rebrov
All the Article in Russian as of July 07, 2008
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