Mazeikiu: Yukos' fate unclear, though EBRD upbeat

  • 2004-12-01
  • From wire reports
VILNIUS - Mazeikiu Nafta, Lithuania's oil refinery and largest enterprise, maintained its focus this week while bracing itself for a major change in shareholder structure.

Although it is still unclear how the inevitable breakup of Yukos will affect the Mazeikiu Nafta, where it owns a majority stake, there is increasing anticipation that the company will have no choice but to sell off other assets - including downstream ones - to meet creditors' claims.

In an analytical review, Troika Dialog, a Moscow-based investment bank, wrote last week that Lukoil, Russia's second largest oil company, is rumored to be interested in acquiring Yukos' 53.7 percent stake in Mazeikiu Nafta, which it owns through Yukos-Finance, a Netherlands-registered subsidiary.

Yukos last week asked the Lithuanian government to postpone the planned purchase of an additional 9.72 percent stake in Mazeikiu Nafta for 120 days, the daily Lietuvos Rytas reported on Nov. 26. It remained unclear, however, how the government, which had been hoping to raise $75 million for the sale, would respond to the request.

Yukos-Finance first announced its desire to buy the stake in October.

Meanwhile, the European Bank for Reconstruction and Development said this week that it was still considering a 10 percent - 18 percent stake in the refinery.

"We are encouraged by consolidated nine-month financial figures of Mazeikiu Nafta." Salvatore Candido, EBRD director for the Baltic countries, said in an interview to the Lietuvos Zinios daily. Previously the bank had considered possible investments into the refinery's equity capital; however, Candido said the bank might ponder other investment options.

Candido noted the importance of perceiving Yukos' strategic approach toward potential investments in Mazeikiu Nafta. In his opinion, EBRD representatives and state officials could hold a meeting once the new government is formed.

Petras Cesna, acting minister of economy, praised the EBRD's intentions to acquire Mazeikiu Nafta stock and said it amounted to a positive evaluation of company's business and results.

"The entry of the EBRD on to the list of Mazeikiu Nafta's shareholders will clearly show that the company is a promising entity and will remain afloat irrespective of Yukos' hardships," said Cesna. "Usually the EBRD sells shares after a five-year period. The bank traditionally picks the projects, which, in my opinion, may generate it at least 30 percent in return per year."

The possibility for new talks with the EBRD emerged in mid-October when Mazeikiu Nafta approved its management plan for the upcoming five-year period. In previous consultations the development bank expressed an explicit wish to review the company's long-term outlook.

Unofficial sources, however, claim that a deal with the EBRD is unlikely to materialize anytime soon.