PKN ORLEN sells mandatory stocks for nearly PLN 1.2bn
The executed agreement provides for sale to Whirlwind of 545 thousand tonnes of REBCO crude oil, representing approximately 18% of total mandatory stocks that PKN ORLEN is required to maintain.
Under the agreement, Whirlwind will maintain mandatory stocks on behalf of PKN ORLEN, and PKN ORLEN is to store these stocks in the same facilities as previously. This is the second transaction of this type in 2012, and the fourth such arrangement entered into by PKN ORLEN to date.
“For two years now we have been reducing the strain on our balance sheet by changing the way our mandatory crude stocks are maintained. The agreements have enabled us to release nearly PLN 2.4bn this year alone. The funds may now be applied towards other objectives of PKN ORLEN's strategy announced in November, in particular those relating to our expansion in the power sector and exploration for unconventional gas,” said Jacek Krawiec, President and CEO of PKN ORLEN S.A. “The sale of mandatory stocks has been possible thanks to the reliability and financial stability of PKN ORLEN which is appreciated by our partners in the transaction,” added Mr Krawiec.
Following the transaction, PKN ORLEN received PLN 1.2bn (VAT-exclusive); the funds will be used to reduce the Company's debt as at the end of 2012.
As was the case in previous transactions, the partner was selected in a tender process and the agreement itself was executed following clearance by the Material Reserves Agency. The agreement was concluded for the period until January 28th 2014 , and its term may be extended.
Whirlwind is a special purpose vehicle, established by RBS Polish Financial Advisory Services Sp. z o.o., a subsidiary of Royal Bank of Scotland plc. Its business includes trade in crude oil.
