Polish refiner PKN Orlen and Czech chemicals group Agrofert have been at odds over splitting Unipetrol's assets. The two companies are now trying to seek a deal on asset restructuring at Unipetrol, the biggest Czech oil refiner and retailer. PKN wants to avoid arbitration with Agrofert and plans to propose new conditions for the split, inviting Agrofert for talks and reiterated interest in Unipetrol's assets.
Earlier this year, PKN had purchased 63% stake in Unipetrol for 13.05 billion crowns (US$564.4 mln) and was due to sell several of its chemical companies to Agrofert for 103 mln euros. Some Unipetrol's filling stations were also due to be sold to ConocoPhillips. However, this sale failed to take off as per an agreed schedule. Agrofert has demanded a penalty of 77 million euros (US$96.6 mln) from PKN for breach of contract. The problem seems to lie on the Polish side in the fact that when the sale price was agreed upon 2 years ago, valuations in the chemicals sector were well below current levels. Post analysis, it was found that the realisation of the contract would generate a loss for PKN. On this basis, a plan with proposed steps has been submitted.
06-Sep-05 
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