PKN Orlen held a conference call on the causes of the fire at the Mazeikiu refinery and the potential implications for the company.
* Fire hit one of the three distillation units, which collapsed but luckily did not damage any other assets.
* The investigation on causes of the explosion will take place, where PKN Orlen will be one of the official observer
* It could from 4 to 6 months to repair the damages however more precise time horizon could be set only after the investigation
* The suffered losses will be covered by the insurance, no exact extend is known
* PKN is firmly determined to close the deal on Mazeikiu at any means. The previously set time-table for the transaction will be kept however the signing of the agreements with the banks, which was planned for mid-October, will be postponed as PKN needs to assess the size of the damage at Mazeikiu first
* The re-negotiation of the end purchase price is possible but PKN Orlen did not specify.
Our view: It is negative for PKN since it seems that there is no direct formula to lower the purchase price in case of material damages. PKN expressed its commitment to finalize the deal: however there is no push on Yukos to re-negotiate the price.