Polish to buy gov. oil

  • 2008-07-16
  • From wire reports
VILNIUS - Poland's oil group PKN Orlen, owner of more than 90 percent of Mazeikiu Nafta (Mazeikiai Oil), has expressed its intention to buy the remaining shares of the Lithuanian oil complex it does not already own from the Lithuanian government.
In line with the agreement made between the government and the Polish company on the purchase and sale of 30.6 percent of Mazeikiu Nafta, the remaining shares, the state-owned interest of almost 10 percent in the Lithuanian oil complex, could be sold to the Polish team under the terms of an option clause, for 277.8 million U.S. dollars (177 million euros) or 3.927 U.S. dollars per share, from three to five years after the closure of the deal.

If the shares were sold earlier, the share price would be 4.0205 U.S. dollars or 284.45 million U.S. dollars in total, so as to prompt the authorities to divest the state's remaining interest before the expiry of the three-year term.
PKN Orlen's board is expected to review the company's investment plans by October. According to the present strategy, the firm intends to spend a total of 21.2 billion zlotys (5.5 billion euros) on corporate-wide investments through 2012, with about 1.1 billion euros expected to be funneled into Mazeikiu Nafta in an effort to restore profitability.

The share purchase offer under discussion however is as yet unofficial, having been made to Lithuania's Prime Minister Gediminas Kirkilas by PKN's new board at a meeting in Vilnius. The government is currently not reviewing the option, says Economy Minister Vytas Navickas, and is ready to do so only "when PKN asks officially, then we will consider it."