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PKN Orlen – Grupa Lotos. The merger is getting closer – there is a decision of the shareholders of the Gdańsk company

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The shareholders of Grupa Lotos adopted a resolution on the merger with PKN Orlen. The consent of the shareholders regarding the terms of the merger is necessary to complete the transaction. On Thursday, an Extraordinary General Meeting (EGM) of PKN Orlen will take place in this matter.

During Wednesday’s EGM of the Lotos Group, the shareholders of this company considered the draft merger resolution on the merger with PKN Orlen, increasing the share capital of PKN Orlen and consent to the proposed amendments to the company’s articles of association.

They voted 98.89 percent. shareholders.

152,476,991 valid votes were cast, out of 152,476,991 shares, representing over 82% of the total. share capital. There were 150 784 838 votes for the resolution, 706 659 against the resolution, and 985 494 abstentions.

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According to the resolution, the merger of Grupa Lotos with PKN Orlen is to take place by transferring all assets of the Gdańsk company, all assets and liabilities to PKN Orlen in exchange for shares that PKN Orlen will issue in accordance with the provisions of the Merger Plan.

On Thursday, July 21, that is the day after the EGM of Grupa Lotos, the Extraordinary General Meeting of PKN Orlen will be held in Płock, during which the shareholders of the concern will also consider a resolution on the merger with Grupa Lotos and an increase in the company’s share capital.

Controversies

The merger of Orlen and Lotos is controversial. About the planned merger spoke in “Rozmowa Piaseckiego” at the end of May this year. Paweł Olechnowicz, president of the Lotos Group in 2002-2016. In his opinion, “this is not a merger” of Lotos. – This is the dissolution of Lotos, the liquidation of one of the best listed companies. There is no doubt (that it is) a dividing up of assets and a sell-off, said Olechnowicz.

– For sure Orlen is not becoming a champion through this type of movement. Orlen introduces additional players to the Polish market that are absent today, for example MOL and Saudi Aramco – commented the former president of Grupa Lotos.

According to Łukasz Frątczak, the author of the reportage “(Un) safe fusion” “It’s hard to find justification in figures for this transaction.” Frątczak in “Stand up and you know” on TVN24 pointed out that Lotos’s result for the second quarter of 2022 has not been published so far. – We have calculations from the brokerage houses of various Polish banks and they all estimate the net profit of Grupa Lotos between PLN 3 billion and PLN 3.8 billion. If we only look at the refinery, and this is the main asset we sell, the profit there will be around PLN 3-3.5 billion – he noted.

– If we subtract the retail, upstream, etc., the profit of the refinery itself will be 3.5 billion, and we will sell 30 percent of shares (…) for PLN 1.115 billion – pointed out Łukasz Frątczak. The TVN24 journalist added that Saudi Aramco’s investment, according to various estimates, will pay off for the Saudi concern after 1-2 months, “after three, it’s easy”.

(Un) secure merger. Watch on TVN24 GO

Orlen and Lotos merger plan

At the beginning of June this year. the management boards of PKN Orlen and Grupa Lotos agreed and signed the Merger Plan of both entities. The companies agreed that the shareholders of this company would receive 1,075 PKN Orlen shares in exchange for 1 Lotos share. At the time of the acquisition, the shareholders of Grupa Lotos will take up new shares in the increased share capital of PKN Orlen and will become shareholders of this company on the date of the merger.

The merger will take place on the date of its entry into the register of entrepreneurs of the National Court Register by the registry court competent for the seat of PKN Orlen.

On Tuesday, the government approved a request for consent to the merger of Grupa Lotos with PKN Orlen, submitted by the deputy prime minister and minister of state assets Jacek Sasin. “The merger of both companies will be part of the consolidation process of the Polish fuel and energy sector companies including Orlen, Lotos and Polskie Górnictwo Naftowe i Gazownictwo (PGNiG). PKN Orlen will play a leading role in this process” – the Chancellery of the Prime Minister said in a statement.

The letter of intent on the commencement of the process of taking over capital control by PKN Orlen over Grupa Lotos, the concern signed with the then Ministry of Energy on February 27, 2018.

Lotos Group refinery in Gdańsklotos.pl

Remedies

PKN Orlen on June 20 this year. received approval from the European Commission to merge with Grupa Lotos. Earlier, on January 12 this year, in accordance with the requirements of the European Commission, the concern from Płock presented the remedial measures planned in connection with the acquisition of Grupa Lotos.

According to the announced decisions, Saudi Aramco is to buy 30 percent. shares in the Lotos refinery, Hungarian MOL – 417 Lotos service stations, and Unimot – fuel depots. In this way, PKN Orlen will fulfill the conditions for the takeover of Lotos, set by the European Commission. At the same time, the company signed contracts with the Saudis for oil supplies, cooperation in the area of ​​research and development and joint analyzes of investments in the area of ​​petrochemicals.

As part of this transaction, the Orlen Group will take up 144 stations at Hungary, which will give the Płock concern over 7 percent. retail market share. As a result, it will be the fourth company in Hungary in terms of the number of stations. In addition, as part of the implementation of remedial measures, PKN Orlen will also extend the network to Slovakia o 41 new facilities.

The long-term contract with Saudi Aramco provides for deliveries of 200,000. up to 337 thous. barrels of oil per day, with the target volume of Saudi oil deliveries at 20 million tons per year. According to PKN Orlen, these deliveries can satisfy up to 45 percent. the total demand of the entire Orlen Group – after the acquisition of Lotos – both in Poland and in Lithuania and in the Czech Republic.

Main photo source: lotos.pl



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