PKN Orlen and the National Property Fund (NPF) signed the Unipetrol privatization contract on Friday. PKN should pay an advance of CZK 1.3bn, i.e. 10% of the purchase price, in two weeks’ time. The major remaining installment will be paid in the autumn after the transfer of the shares. The transaction is now being reviewed by the Czech Anti-Monopoly Office and the European Commission. Unipetrol's price may change if the IOC consortium of ConocoPhillips, Agip and Royal Dutch/Shell decides to exercise an option to buy Unipetrol's 51% stake in Ceska rafinerska (the IOC holds 49%). In the sale agreement, there is reportedly a very detailed mechanism for price adjustments upwards or downwards in the event a part of Craf is bought out. The option exercise price will be based on an appraisal already made by the IOC. Both the NPF and PKN believe that the options will not be exercised; the IOC members declined to comment on the issue. The transaction price may also change (+15% / -25%) if PKN's audit differs from Unipetrol's 2003 audit.
Source: Bloomberg, Reuters
Jan Hajek