Chief executive Stephen Theede said, &to=http://english.pravda.ru/main/18/88/351/14492_yukos.html' target=_blank>Russian oil giant Yukos is "close to insolvency" and will call an emergency shareholders meeting for next month to consider a &to=http://english.pravda.ru/main/18/88/351/14522_Yukos.html' target=_blank>possible bankruptcy.
Theede said the meeting would be held Dec. 20.
"Bankruptcy hasn't been something we've wanted to do, but if we're bankrupt, we're bankrupt," Theede was quoted as saying by Dow Jones Newswires.
If a court upholds a possible bankruptcy filing, Yukos' main shareholder, Menatep - &to=http://english.pravda.ru/main/18/88/351/9714_khodorkovsky.html' target=_blank>founded by former company CEO Mikhail Khodorkovsky - would have a strong position among the company's creditors, reports Forbes.
According to Reuters, Theede told reporters Russia's largest oil exporting company could not continue to operate normally after being presented with $6.7 billion in tax demands this week.
"The situation we find ourselves in today is not sustainable. We cannot continue like this for much longer," the American chief executive said.
But, despite that warning, Theede stuck to YUKOS' oil output target of 86 million to 87 million tonnes (1.73-1.75 million barrels per day) this year.
The new tax demand comes on top of $4 billion YUKOS still owes for 2000 and 2001, as well as $3.4 billion in new demands levied against its main production unit, Yugansk. Russian law allows for a court-supervised two-year period when bankrupt companies can seek to agree on a schedule for repaying their debt. Yukos would have to persuade a Russian court to let the company seek protection from creditors.
The company's shares fell 4.92 rubles, or 5.3 percent, to 88.50 rubles, as of 1:26 p.m. in Moscow, valuing the company at $8.3 billion. The stock has dropped 26 percent this week.