Sale of Spolana to Anwil Wloclawek
This morning, a contract for the sale of UNIPETROL’s share (81.78 %) in SPOLANA a.s., was signed between UNIPETROL and the Polish chemicals producer Zakłady Azotowe ANWIL Spółka Akcyjna. The purchase price for Spolana shares amounted to over CZK 640 million. In addition, the repayment of approx. CZK 660 million that Spolana owes to Unipetrol was ensured. The execution of the contract is the result of a nine-month public tender in which ten investors had initially shown interest in purchasing the shares.
Prague, 27th of October 2006 - The decision regarding the disposal of the Spolana shares was launched consistent with the new UNIPETROL strategy communicated to all Unipetrol´s shareholders as well as with the Main Strategic objectives and key targets within long-term activity plan in Unipetrol presented at the Shareholders General Meeting of Unipetrol in April 2006. According to the announced Unipetrol strategy – the Equity Story 2005, the company is focusing on its core activities, namely refining, petrochemicals, and fuel retailing. From this perspective, Spolana represents a second tier business and its disposal is beneficial for UNIPETROL. The financial resources obtained from the sale of Spolana will enable UNIPETROL to invest more in its core businesses and to restructure the debt within the whole company. “We prefer to be the top player in a few segments than to be an average player in many”, said François Vleugels, CEO of Unipetrol. At the same time it will be advantageous for Spolana to be allied with a strategic partner who will cooperate directly with regard to increasing the company´s value, allocating dedicated capital expenditure and performing activities towards raising its competitiveness.
The key parameter of the divestment process is to maximize value for UNIPETROL and its shareholders. Therefore it was essential to run the tender for the sale of Spolana in compliance with the best standards and practises as followed in similar M&A transactions.
-To be on the safe side, not only the price and valuation were checked and evaluated by an independent expert, but also all the proceedings within the whole divestment process” - said Dariusz Marzec, CIO of UNIPETROL.
- Anwil is an investor who is able to add value to Spolana and bring its expertise and professional experience to the company - said François Vleugels.
Finally, Anwil turned out to be the investor, compared to other interested bidders, who will be best able to share to the maximum extent with UNIPETROL, the synergies from the acquisition of Spolana. This is due to geographic, market and capital conditions.
An important justification for the purchase price negotiated between UNIPETROL and Anwil was the fairness opinion elaborated by the independent consulting firm BDO. The fairness opinion determined the value of Spolana shares which, in the opinion of the valuer, could be achieved in a sale of the shares on the open market, and which assumed certain synergies in the business activities of potential buyers. According to the BDO opinion, the fair value of the 81,78 % Spolana shares being divested ranged between CZK 490 and 757 million. Following that, upon the request of UNIPETROL´s Supervisory Board, UNIPETROL asked for another valuation by the Czech court experts Mr. Jiří Hlaváč and Mr. Ladislav Kollárik (Horwath TPA Notia Consulting) to reconfirm the market value. This valuation, based on discounted cash-flow methodology similar to the BDO approach, also reflected certain potential synergies with a strategic investor, and ranged between CZK 406 and 712 million for UNIPETROL´s shareholding in Spolana.
In addition to meeting the financial parameters, UNIPETROL required that the new Spolana owner would be committed to maintaining in future some business and operating practises of Spolana, including the preservation of commercial relationships with other companies within UNIPETROL Group.
For more information, please check Unipetrol´s website: www.unipetrol.cz
See also: Regulatory Announcement as of 27 October 2006
UNIPETROL is a holding company which owns a group of companies operating in the petrochemical industry in the Czech Republic. In 2005, UNIPETROL became part of the PKN ORLEN Group, Central Europe's largest downstream oil company. UNIPETROL’s focus is mainly on crude oil processing, the distribution of fuels, and petrochemical production. In all these areas, UNIPETROL is a major representative in the Czech Republic and an important player in the Central European market. In 2005, UNIPETROL’s revenues and net profit reached CZK 81 bn, and CZK 3,4 bn respectively.
SPOLANA is among the most important chemical companies within the Czech industrial base. It was incorporated on May 1st 1992 by transformation from a government-owned national enterprise. Since the end of 2001, Spolana has been a part of the UNIPETROL Group. The company’s main product lines are PVC, caprolactam and inorganic chemicals. More than 85% of the production was exported last year. Spolana’s business sales volume makes the company the fourth largest chemical company in the Czech Republic.
