Russian firm buys Kvaerner units

Kvaerner could be split up between Yukos and Aker

The troubled Anglo-Norwegian construction firm Kvaerner has agreed to sell two UK-based units to Russian oil company Yukos for $100m.

"Yukos.. .has accepted an offer from Kvaerner to purchase the Hydrocarbons and Process Technology business of Kvaerner... for an aggregate consideration of $100m," the Russian firm said in a statement.

The two units provide Yukos with up to $50m in services to its Yuganskneftegas oil exploration division.

"These are exactly the companies which have been working on our fields in Siberia," Hugo Ericsson, head of Yukos's international information department said last week.

The deal must be approved by Kvaerner's existing board and a new board that will be elected on 2 November, when Yukos representatives are expected to be elected.

Last Wednesday, Yukos's Dutch subsidiary launched a bid to take its stake in Kvaerner from 12% to 25%, and become the largest shareholder in the ailing construction firm.

Kvaerner break-up?

Kvaerner, which employs 35,000 people and is desperately fighting off bankruptcy, may end up split between Aker Maritime, which holds 18%, and Yukos, analysts have said.

Kvaerner Hydrocarbons provides engineering services to onshore oil and gas projects and employs up to 600 people, mostly in London.

Kvaerner Process Technology is involved in the research, development, and sale of process technologies and equipment for industries such as petrochemicals and employs about 375 people in Britain, Switzerland, France and Italy.

Cash crunch avoided

Yukos has said it might help Kvaerner through its current financial problems, including purchasing new shares.

But the firm, Russia's second biggest oil company, has said it will limit its stake to a maximum of 40%.

Under Norwegian law, Yukos would have to buy out all of Kvaerner if it breached the 40% level.

Last Thursday, Kvaerner said it had secured 500m Norwegian crowns (£39.3m; $56.2m) from banks to avert a cash crunch this month, but would need more money by November.

Kvaerner is currently trying to refinance its debt and plans to issue up to 2bn Norwegian crowns in new shares to stave off bankruptcy.