| LUKOIL will pay Greece $400 million Oil company LUKOIL is completing a deal to acquire a 23.17% stake in Greek Hellenic Petroleum. Although the size of the stake offered for sale is small, the Greek government expects to find a “strategic investor” in this way. So LUKOIL may get the right to manage the largest company in Greece.
On Friday, the Greek Ministry of Development, responsible for privatization, announced a consortium of LUKOIL and the Swiss-Greek Latsis Group as the exclusive buyer of Hellenic Petroleum shares. As a ministry representative told AP, negotiations on the terms of the deal will last until the end of May, when the final contract can be expected to be signed.
According to the Greek government, the consortium has agreed to pay 450 million euros (about $417 million) for Hellenic Petroleum shares, which is 20% more than their market value. LUKOIL's share in the consortium is 66.6%.
The Latsis Group, owned by the Swiss-based Greek wealthy Latsis, owns Greece's third largest oil refinery, Petrola Hellas. As reported by the AP, citing the local press, the development project of Hellenic Petroleum, presented by the consortium, involves its merger with Petrola Hellas. It is precisely this circumstance that participants in the Greek stock market explain the unexpected premium that LUKOIL and Latsis agreed to pay to the government for the company's shares.
LUKOIL and Latsis were the only contenders for Hellenic Petroleum shares. In April, the Austrian OMV withdrew its application, and in December, the Russian Yukos. Earlier, a YUKOS representative told the Vremya Novostei newspaper that “buying such a large stake at the market price, taking into account the obligations to invest in the development of the company, is too expensive.” LUKOIL obviously has the opposite opinion and is even willing to overpay.
“In the event of the acquisition of Hellenic, LUKOIL will not only become a participant in the Greek petroleum products market, but will also strengthen its position in the much more dynamic markets of the Balkan Peninsula countries,” says LUKOIL’s restructuring program.
“The war in the Balkans is over, and now the economies of the countries of the former Yugoslavia are reviving at a rapid pace. This is the fastest growing market in Europe, and with the purchase of Hellenic we will gain the best position in this market,” says LUKOIL Vice President Leonid Fedun. According to LUKOIL estimates, consumption of oil and petroleum products in the countries of the former Yugoslavia will increase by 50% by 2015, while in Greece - by no more than 6-7%.
Hellenic owns two oil refineries in Greece and one in Macedonia, 1,500 gas stations in Greece and several dozen more in Albania and Georgia. LUKOIL, in turn, owns factories in Romania, Bulgaria, Ukraine and seeks to create a chain of enterprises that will allow the sale of oil from the Caspian region, where the Russian company is developing new projects. Oleg CHERNITSKY |
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