Банкеръ Weekly

Briefs

LUKOIL WILL BE BARGAINING TO BUY PETROL CHEAPER

Next week the Russian company LUKoil will start negotiations for buying the Bulgarian fuel distributor Petrol, Valentin Zlatev, Executive Director of LUKoil Bulgaria EOOD, told the BANKER weekly. Experts are presently preparing an evaluation of the company. The confusion regarding the sale originated from the announcement of the Bulgaria Stock Exchange-Sofia, saying that LUKoil would buy 20 million shares, or 18.3% of the capital of Petrol AD against BGN80MN (BGN4/apiece). In that way the Russian company will make use of an option in its franchise contract with Petrol, signed in 2001. In a conversation with a reporter of the BANKER weekly Mr. Zlatev explained that LUKoil was interested in the company as a whole and not only in a minority package. However, we should negotiate a reasonable price, he added. At a selling price of BGN4 per share the Russian company will acquire Petrol against BGN437MN. Obviously, ticklish negotiations will follow. And even if they are successful, the deal shall be effected only after it is approved by the Commission for Protection fo Competition. If LUKoil acquires Petrol's assets it will already have a total of 565 petrol stations in this country. According to Mitko Subev, Executive Director of Petrol Holding and Chairman of Petrol's Supervisory Board, the company holds 18% of the retail market of fuels in Bulgaria, and LUKoil Neftochim holds about 5-6% of it.Presently, 92.57% of Petrol AD's stocks are in the hands of Petrol Holding, whose biggest shareholders are Mitko Subev, Friedrich Tsaufal, Andrey Arzhanov and Alexander Melnik. If LUKoil acquires that package it will have to make a tender offer to the other shareholders for the remaining part of the company's paper. Instead of the planned listing on the London Stock Exchange the possibility of Petrol's disappearing from the Bulgarian capital market after the end of the operation should not be ruled out. If the sale is effected, it is quite possible for LUKoil to give up the present owner's idea for issuing Global Depository Receipts. The decision for them and for the capital raise had to be made at the general meeting on December 7. Due to changed agenda, however, the discussion of these items was postponed for next year. In fact this is not LUKoil's first attempt to buy the top Bulgarian fuel distributor. The Russian company took part in the tender for the privatisation of a 51% of Petrol's capital in 1999, but was removed from the procedure. The winner in the tender was International Consortium Bulgaria, in which Yukos Petroleum Bulgaria, Petrol Holding, and Austria's OMV participated. The deal was effected at USD52MN. Another 25% of the company were divested through mass privatisation. The Russians, however, did not remain empty-handed. In the end of 1999 LUKoil purchased against USD101MN 58% of Neftochim's capital through its Bulgarian subsidiary LUKoil Petrol AD. According to information of the LUKoil parent company, it is the second biggest private oil company in the world, holding 1.3% of the global deposits of oil and gas.каре:Petrol's consolidated profit for the first nine months of 2004 exceeded BGN9.7MN, up from the modest BGN261,000 for the same period of last year. Net proceeds from the company's activity leaped from BGN258.8MN to BGN650.9MN. This is mostly due to the fact that Naftex Petrol was included in the portfolio of the fuel distributor.

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