Lithuania to sell stake in Mazeikiu Nafta

VILNIUS 's The new Lithuanian government has announced that it will sell its near 10 percent share in Mazeikiu Nafta (Mazeikiai Oil), the sole Baltic oil refinery, to Poland's PKN Orlen for $284.45.

"As far as I know, talks with PKN Orlen will begin this week. We need to talk about that," Prime Minister Andrius Kubilius said during the Cabinet meeting.

Lithuaniain late 2006 sold PKN Orlen a 30.66 percent stake in the refinery and retained the option to sell the remaining 9.98 percent. The country's new center-right coalition government has said in its crisis management plan that it intends to exercise this option.

Under the 2006 agreement, if the government sells its remaining stake in Mazeikiu Nafta, some 70,750,000 shares, within three years after the transaction was completed 's that is, by mid-December 2009 's the price will stand at $4.02 US dollars per share, or $284.45 million in total.

If the government sold the shares in three to five years' time, then the Poles would have to pay the same price as they paid in December 2006, that is, 3.93 dollars per share or $277.835 million in total.

In December 2006, the government sold 30.66 percent of shares in Mazeikiu Nafta to PKN Orlen for a total of $851.829 million. The Polish group bought another 53.7 percent of shares from Russia's Yukos for 1.49 billion litas, thus raising its interest to 84.4 percent.

The Poles have since increased its shareholding in the refinery to 90.02 percent.