UPDATE 2: Bashkortostan govt demands 106 bln rbl redemption from Sistema

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UFA, Jun 6 (PRIME) -- The government of the republic of Bashkortostan has demanded redemption of 106 billion rubles from multi-industry holding Sistema in favor of oil company Bashneft under a suit filed by oil major Rosneft, a representative of the region’s Ministry of Land and Property Relations said in a court on Tuesday.

In May, Rosneft filed the suit seeking to recover an alleged loss incurred by Sistema and its unit Sistema-Invest, which Rosneft believes were involved in asset stripping of Bashneft in 2009–2014, when they owned a controlling stake in the company. On May 24, Rosneft requested the Arbitration Court of the republic of Bashkortostan to raise claims under the suit to 170.6 billion rubles.

The representative told the court that the ministry is also a shareholder in Bashneft and asked the court to include the government of Bashkortostan into the case. “Our demands are identical to the claim of the claimant, but to the initial claims, before they were raised,” the representative said.

Judge Irina Nurislamova has included the ministry into the case as a co-claimant.

A Rosneft representative said that the volume of the claim was raised after its recalculation taking into account the dollar rate as Bashneft’s operating activity largely depends on the rate of the U.S. dollar. “Export revenue from sales of oil and oil products accounts for a significant share in Bashneft’s operating activity. Bashneft’s spending … is also largely carried out in the foreign currency or depends on the U.S. dollar rate,” the representative said.

“The company bought new equipment with foreign currency. Taxation, including export duties and the mineral extraction tax, were tied to the dollar rate. The share of the duties and taxes accounts for at least 30% in the structure of production costs. The share of foreign currency loans in Bashneft’s portfolio exceeded 50%.”

The representative of Bashkortostan said that the government of the republic supports the increase of the claims under the suit.

(56.6152 rubles – U.S. $1)

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