Sasin on Orlen-Lotos merger: profits from merger will be much greater than losses
Profits from the merger of Orlen and Lotos will be much greater than the losses caused by the sale – by the EC’s decision – of Lotos’ shares, e.g. part of the petrol stations, MAP chief Jacek Sasin said. Asked when and to whom Lotos’s assets will be transferred, he replied that it would be announced in the coming days.
January 14 is the deadline for PKN Orlen to present the European Commission with the so-called “countermeasures” enabling the takeover of Lotos. They are meant to protect the Polish fuel and refining market from monopoly. In November 2021, the fuel company received approval from the EC to extend the work.
Deputy Prime Minister, Minister of State Assets Jacek Sasin in Program I of the Polish Radio asked to whom the assets that Lotos will dispose of in connection with the merger with Orlen will go and when it will happen, answered:
“Since we have deadlines set by the European Commission, we can say that we will actually communicate this in the coming days, because these deadlines are already approaching very strongly at the moment. They concern the middle of January, so this is such a time perspective. And this will become a fact in a moment.”
We, as a state owner, would prefer not to have to sell anything so that the merger would be a simple merger of Orlen and Lotos,” he added.
It is an abnormal situation that on the Polish market there are two entities with dominant state capital that compete with each other – explained the head of MAP. In his opinion, it would be better for those entities to join forces and combine their capabilities if only to maximise investments in renewable energy sources.
But such were the decisions of the European Commission, so-called countermeasures, which force us to sell part of our assets. It concerns the shares in the Lotos Gdańsk Refinery and in the sale of a part of Lotos petrol stations – Sasin reminded.
According to the minister, “profits from the merger will be much greater than the losses caused by the sale”. As he mentioned it is about synergies, possibilities of joint purchases, joint actions, the concentration of investment capital.
All this will bring large profits for the new, merged fuel and energy concern in the nearest future and it will certainly pay off,” Sasin stressed.
The process of a capital takeover of Lotos Group by PKN Orlen began in February 2018 with the signing of a letter of intent with the state treasury, which has 53.19 per cent of the votes in Lotos at the General Meeting of Shareholders.
PKN Orlen – by the decision of the EC – has to sell part of Lotos’ assets in order to merge with the company. Radio Zet reported on Sunday that Saudi Aramco is likely to be the partner to buy a part of the refinery in Gdansk, while Lotos’s stations are to be bought by Hungarian MOL. PKN Orlen spokeswoman Joanna Zakrzewska, commenting on this information, assured that negotiations with partners regarding countermeasures in connection with the takeover of Lotos Group by PKN Orlen have not been finalized.
Media reports on the selection of potential partners are pure speculation. And reproducing them, which is done by opposition politicians, is an abuse – she added.
The steps set out by the EC in July 2020 to enable Orlen’s acquisition of Lotos include the sale of a 30 per cent stake in the company’s refinery along with a large block of management rights. This is to give the buyer the right to about half of the refinery’s production of diesel and gasoline while providing access to storage and logistics infrastructure.
Another condition is the sale of nine fuel depots to an independent logistics operator and the construction of a new jet fuel import terminal in Szczecin, which, once completed, would be handed over to that operator.
The EC also ordered the sale of 389 fuel stations in Poland, representing about 80 per cent of the Lotos network, the sale of Lotos’ 50 per cent stake in a joint venture with BP that trades in jet fuel, the provision of up to 80,000 tons of jet fuel annually to competitors in the Czech Republic through an open bidding process, the divestiture of two bitumen production facilities in Poland, and the provision of up to 500,000 tons of bitumen or so-called heavy residue annually to a buyer.