Sale of The Company
The company was first privatized by the Lithuanian government in 1999, when it was bought by Williams Companies, a group based in the USA. Later, Williams ran into financial trouble, and their stake in Mažeikių Nafta was bought by the Russian company Yukos. However, in 2003 Yukos ran afoul of the Russian authorities and was required to pay billions of dollars in taxes. Facing bankruptcy, Yukos began to sell off its assets, including Mažeikių Nafta.
Several potential buyers from Russia, Kazakhstan and Poland showed interest in acquiring the refinery, whose majority stakeholder was now Yukos International, a Yukos syndicate. After several months of talks the proposal from Polish company PKN Orlen was found most lucrative and chosen. Additionally, it was deemed most desirable by Lithuania, which has been aiming to avoid the refinery and infrastructure being bought out by Russian interests.
The agreement between Orlen and Yukos International to buy out the latter's 53.7% stake in the company, was made in June 2006. Several weeks later, PKN Orlen signed a deal with the Lithuanian government to buy a further 30.66%. The European Union's regulatory authority approved the deal on November 7, after ruling that it would not significantly harm competition in the European economic area or any substantial part of it. The buyout was finalized on 15 December 2006, with USD 1,492,000,000 being paid by PKN Orlen to Yukos International, and USD 851,828,900.31 to the Lithuanian Government.
Read more about this topic: ORLEN Lietuva
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