Latvia's Ventspils Nafta will be auctioned October 5

In Hungary

Latvia's state-asset-sales agency has approved a plan to auction the state's 38.6% stake in Ventspils Nafta Oil Terminal Oct. 5, said Martins Jaunarajs, an investment banker at A/S Parex Banka, the lender managing the sale. The terminal will be sold in packets of 19,415 shares, raising at least 73 million lati ($135 million) at a minimum share price of 1.81 lati, Parex Banka said. If the entire stake isn't sold, Parex will buy the remaining shares. Ventspils Nafta once carried 15% of Russia's oil products through its pipelines. The volume plunged after OAO Transneft, Russia's pipeline operator, cut crude supplies in 2002. The government hopes a new investor will get oil flowing through the pipelines again. Bidders for the oil terminal may include PKN Orlen SA, Poland's biggest oil refinery; KazMunaiGas, the state-owned Kazak oil company; and OAO Rosneft, Russia's state-owned oil company, Economy Ministry spokesman Oskars Balodis said Aug. 8.

A group of Austrian investors led by Martin Schlaff may also bid. New Era, the largest opposition party in parliament, said yesterday it may take legal action if any procedural problems occur with the state agency's decision to approve the auction. „This auction seems to rule out all the big investors,” a former economy minister, Krisjanis Karins of the New Era party, said yesterday in an interview. He cited changes to the auction procedure that will break up the shares into three different packets of 25%, five and seven%. Because of a 1997 agreement with Latvijas Naftas Tranzits, a closely held oil transporter that owns 49% of Ventspils, the transporter can veto any auction, Jaunarajs said in an interview Aug. 28. Parex Banka will also not give a prospectus to potential investors, since LNT declined to make provide additional information. Instead, it will hand out a memorandum of publicly available information, Jaunarajs said. (Bloomberg)

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