The European Commission has fined five synthetic rubber producers, including Unipetrol, a total of € 519m for running a price cartel on two types of butadiene rubber. Unipetrol’s fine amounted € 17.6m, which must be paid within three months, Rene Keller, a spokesman for Unipetrol subsidiary Kaucuk, told Interfax Wednesday, adding that it would likely issue an official response after meeting with company lawyers. Apart from Unipetrol's Kaucuk and Stomil, companies belonging to Italy's Eni, Germany's Bayer, the Dutch-Anglo group Shell, Dow Chemicals of the U.S., Unipetrol and Trade-Stomil operated the cartel from at least 1996 to 2002, according to the EC. Unipetrol refuses any cartel agreement and intends to appeal the fine, HN Daily reported citing company's CEO.
Our view: The figure came above our expectation of € 10m, however much lower than the maximum possible fine of € 40m. The fine equals 14% of the estimated net profit 2006F for the Unipetrol group. Yesterday Unipetrol shares dropped slightly in reaction to the Kaucuk fine news, but quickly rebounded. It is still unclear whether the fine should be paid and who will pay it Unipetrol or new owner of Kaucuk Polish Dwory. Until these issues are unknown, we reiterate our HOLD recommendation with the Fair value estimate of CZK 227.1.