Mazeikiu Nafta experienced a fire in the spring of 2006 that was not made public, according to Lithuanian media quoted by portal pb.pl. According to the Lithuanian media reports the estimated damages of the fire equaled US$ 3m and the public was not informed because of the rush to prepare the refinery's sale. Orlen's spokesman Dawid Piekarz admitted that the event took place before PKN signed a deal on the purchase of a stake in Mazeikiu Nafta.
Our view: The fire was less serious than the recent October 12 fire (estimated damages of US$ 22.5-47.5m). We have already expressed our concerns regarding the quality of refining assets at Mazeikiu and PKN’s intention to acquire the refinery by all means. We expect neutral to slight negative reaction of the market to the news.