Sat, Nov 21 2009

LUKoil, Petrol seal 463.5M deal

Fri, Apr 25 2008 16:46 CET byElena Koinova 136 Views

Russian oil processing company LUKoil and Bulgaria's fuel retailer Petrol shook hands on April 24 over a deal that reconciled a long-running dispute between the two and looks set to trigger a reshuffle in the fuel retailer market.

Under the agreement, cleared on April 24 by Bulgaria's anti-trust authority CPC, the two companies agreed to the withdrawal of all lawsuits against each other and to the sale of 75 gas stations and a fuel depot in Sofia's Iliantsi neighbourhood of Petrol to LUKoil.

The value of the transaction is 463.5 million leva, 305 million leva of which are payable for the gas stations and the remainder for the fuel depot.

LUKoil will pay in two instalments. The first is due by the middle of the year and the rest by the year's end.

The deal is costly to Petrol because half the stations are among the company's most profitable. They account for 238 million leva of Petrol's annual sales or 30 per cent of annual revenues, company representatives told Dnevnik daily.

According to experts, the deal will even the market shares of the two companies to 18 per cent. So far Petrol was the largest fuel retailer with a 20 per cent market share, ahead of Shell and OMV with a market share of, respectively, 16 per cent.

The trend is that the top four companies will even out their shares in four years' time.

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