Byrne, Blackstone and Matrix team up to prevent Rosneft IPO

The controversial IPO of Russian state oil giant Rosneft faces its toughest legal challenge on Monday when an interim injunction application brought by Yukos will be heard.

A High Court directions hearing today before Mr Justice Charles was adjourned to Monday, where Yukos will seek permission to delay Rosneft’s IPO while it brings a suit alleging money laundering and conspiracy to defraud.

The case stems from Rosneft’s controversial acquisition of its chief oil-producing asset, Yuganskneftegaz. Yukos alleges Rosneft stole the subsidiary from it in a fraudulent bailiffs’ auction organised by the Russian Federation.

The injunction asks the High Court to examine the roles played by the Financial Services Authority and London Stock Exchange in granting Rosneft permission to list.

Should the injunction be successful, Rosneft would not be admitted to trade as intended on Wednesday (19 July).

Rosneft today priced its IPO shares at $7.55, meaning the company would raise $10.4bn if the listing went ahead, making it the world’s fifth largest IPO. The IPO would value the company at $80bn.

Byrne & Partners litigation partner Nicola Boulton is leading advisor to Yukos, and has instructed Matrix Chambers’ Clare Montgomery QC, Blackstone Chambers Javan Herberg and Monckton Chambers Piers Gardner.

Byrne & Partners has been acting for Yukos for the past two years. Its representation of the company is separate to various shareholders’ litigation, with Covington & Burling partner Tom Johnson leading an action on behalf of a number of US, Spanish and Dutch investors. The action is also unrelated to the criminal trial of former Yukos chief executive Mikhail Khodorkovsky.

Rosneft, who was advised on its IPO by Cleary Gottlieb Steen & Hamilton, has instructed Travers Smith in defence of the injunction application, and was represented in court by Brick Court Chambers’ Mark Howard QC.

The FSA has instructed Ashurst litigation partner Edward Sparrow and Fountain Court Chambers’ Michael Brindle QC.

The LSE has instructed Freshfields, and Brick Court Chambers’ Richard Gordon QC for its defence.

ABN Amro Rothschild, Dresdner Kleinwort, JP Morgan and Morgan Stanley are acting as joint global coordinators for the IPO, and have taken advice from Linklaters.

Some of the world’s biggest oil companies, including BP, have purchased Rosneft shares through the IPO.