considers to resign from some investments or postpone them till later, Piotr Kownacki said in an interview for Rzeczpospolita daily. The company might need the money to finance the acquisition of the shares of Ceska Rafinerska, which are to be sold by Conoco Philip
s. The funds for investments in Mazeikiu had to be limited, but Orlen
plans to invest at least $1bn in five years. The company finishes its economic plan for 2012 and plans not to increase debt so that the concern's rating is not diminished. The plan will be ready in April, but it will not be revealed until the general shareholders' meeting summing up 2006.
Our view: Until knowing which exactly investments will be postponed, it is hard to assess the impact on the valuation. We believe the delays might be justified if the funds are used for further expansion of Unipetrol
’s share in Ceska Rafinerska, which in our view will have shorter payback period due to the existing synergies. However, the return is highly dependent on the price PKN
will pay for the stake in CR. Knowing the high interest of Lukoil
in the Czech refinery, we believe that the competition and thus the price for the stake might be quite high. Since the delay in investments plans are generally not welcomed by the market, we expect the news to have a negative trading impact on the share price today.