There would be major delays to replacing a vacuum distillation unit destroyed by a fire, Reuters reported on Tuesday citing the technical director of MazeikiuNafta. According to him it could take up to a year, which seemingly longer than the previous estimate of 6-9 months made by the company immediately after the mid-October fire. Mazeikiu was planning in the interim to install a mothballed vacuum distillation unit; this however would only increase current refining levels marginally, CEO Paul Nelson English said.
Our view: We patiently wait for the closing of the transaction as we believe that only after PKN will become the majority owner, the information on the value of Mazekiu assets will become more transparent. In the meantime we think, that the market concerns on eroded value of transaction were already priced in, therefore we do not expect any major negative reaction to the news.