A delegation from the Lithuanian government met with representatives of the Polish Treasury and PKN Orlen to discuss the schedule of Mazeikiu takeover. Lithuanian PM Gediminas Kirkilas said that the change of government in Lithuania will not affect the acquisition process. PKN CEO Igor Chalupec maintained his view, there is no reason to be concerned with potential problems regarding crude supply to Mazeikiu, despite the fact that it was these problems which earlier forced US company Williams to withdraw from the business.
Our view: We have only slight doubts about supply security. If PKN cannot ensure crude supply of Mazeikiu via pipeline, it could go for purchases via the Butinge terminal. However, it will definitely have negative impacts on Mazeikiu’s profitability. Lithuanian governments commitment to the deal is a calming news for the market, but we do not think it would have any direct impact on the share price of PKN.