As of 23 October, Vitol R&M acquired 4,702,814 vote-ready stocks in Ventspils nafta as part of the mandatory stock buy-back offer. The company now indirectly owns 103,072,879 stocks, or 98.65% if the total number of vote-ready stocks in the company.
Euromin Holdings (Cyprus) Limited, which is owned 100% by Vitol R&M, acquired stocks in a direct way, as confirmed by Ventspils nafta.
On Thursday, 29 October, the concern received an announcement from Euromin Holdings (Cyprus) Limited regarding the acquisition of direct influence in Ventspils nafta and Vitol R&M’s announcement regarding acquisition of significant volume of indirect influence in Ventspils nafta, as noted by the company.
BNN had previously reported that, according to the board of VN, a larger share of stocks held by a single stockholder will increase the efficiency of the company’s activities and future development. With that, the board has decided that the recently extended offer is in VN’s interest. The board has also said there are currently no plans in regards to any changes to production volumes, company’s location or job cuts.
In this announcement it was repeatedly explained that VN’s majority stockholder Euromin had announced a buy-back offer in October. This offer was extended in accordance with the 15 October decision of the Finance and Capital Market Commission. The price of a single share in that offer is EUR 4.56. The board has reviewed this offer. In order to assess whether the offer accurately reflects the true worth of VN stocks, the board has done calculations of its own, which, based on the annual account of 2014, is estimated at EUR 326,250,000. With that, the worth of a single VN stock is EUR 3.12.
The board has concluded that Euromin’s offered buy-back price of EUR 4.56 means a significant inflation of the actual price of VN stocks. The board adds that prices of mandatory buy-back offers in Latvia are regulated by the Financial Instruments Market Law.
As previously reported, it was reported in the middle of September that VN’s largest co-owner – Vitol Group’s owned Euromin – procured 43.25% of VN stocks for EUR 79.98 million thereby acquiring 93.24% of all stocks in the company. According to information provided by sides involved in the transaction, the price of individual stocks was EUR 1.77.
By acquiring 93.24% of VN stocks, Euromin now has an obligation to provide buy-back offers to other remaining stockholders. If the extension of those offers is successful, Euromin may consider pulling VN from the regulated market.
In September, VN experienced the largest stock price growth in Baltic stock markets – by 186.24%.
Euromin Holdings Limited had previously bought an additional 11,016 VN stocks in September, according to information from Nasdaq Riga stock market.
Net revenue of VN and its subsidiaries was EUR 21.22 million in the first half-year of 2015. Consolidated revenue has grown by 7.6%, reaching EUR 95.66 million. Net revenue of last year’s period was EUR 4.35 million.
According to Swiss lawyer Rudolf Meroni, nearly EUR 80 million is an appropriate price for 43.25% of stocks of Ventspils nafta, which Ventbunkers’ subsidiary Latvijas Naftas tranzīts has sold to Vitol Group’s Euromin Holdings (Cyprus) Limited.
Ventbunkers board member Edgars Ciniņš notes that this deal is a logical step in VN’s development. It also helps Euromin Holdings Limited to increase its portion of stocks.
He explains that this deal has been in development for a long time and is «the result of hard work and devotion of many people». «I believe recently voiced speculations regarding the deal and the price and unjustified and based purely on delusions. I have no doubts about the transparency of this deal and its contribution to the company’s interests,» – said Ciniņš.
The entrepreneur also explains that it is far more important to consider all benefits from the deal than it is to give in to unjustified speculations. The price of the deal cannot be taken out of context. «I cannot understand why anyone would want to challenge this deal, unless, of course, it is done solely because of unknown personal interests. I believe everyone will benefit from this deal – the sides involved, the small shareholders in VN, Ventspils Freeport and Latvia’s transit industry as a whole,» – he adds.
Relations between Ventbunkers and Ventspils nafta have been «more than tense» for many years. Hard work has made certain the two companies are trusted partners. It is clear that they will work together to develop Ventpils Freeport. «It also helps preserve resources that would otherwise be used to resolve pointless disputes,» – adds Ciniņš.
«The recent surfacing of speculations and dissatisfaction with this deal can be easily explained with simple envy. There will always be people who dislike it whenever someone else has a good life and is successful in business, especially if the envious person is not nearly as successful in business,» – concluded Ciniņš.
VN Board President Roberts Kirkups told Bloomberg that the sudden rise in stock prices, which affected FCMC’s assessment, is not in any way related to the company’s value. It is more likely related to attempts of some people to make the deal look uncompetitive.
As reported by Delfi, the only person to have publicly criticized the recent VN deal is none other than Aivars Lembergs.
It has been proven time and time again that Lembergs has a deep interest and involvement in Ventspils transit schemes.
This is proven by transcripts of a wire-tapped telephone conversation in Copenhagen published by Pietiek.com, in which it is mentioned that Lembergs has been the biggest owner of Ventspils transit companies for years, countless documents depicting ‘transit wars’ in Latvia, Lembergs’ arrested properties and relationships with shareholders of transit companies.
The wire-tapped Copenhagen telephone conversation also details how Lembergs discussed massive purchases, decided on solutions for situations in different Ventspils companies and how he found time for political consultations and discussion regarding election financing with then the Prime Minister of Latvia Aigars Kalvitis.
The loudest ‘reporter’ is Lembergs, whose dislike of Meroni is loudly reflected in criticisms of this deal. Lembergs continues announcing Meroni’s alleged personal benefits from the VN deal.
What is interesting in this whole situation is that even Lembergs’ personal newspaper with an ironic name ‘Neatkarīgā Rīta Avīze’ has become an active opponent of the VN deal. The newspaper continues scaring pensioners and mentioning other ‘thinkers’ who dislike this deal.
It should be added that Delfi named Oleg Stepanov as the ‘first person to lose the most in the decade-long transit war in Latvia’s business environment’. It is entirely possible that the peaceful resolution of the court process in England may have cost Stepanov USD 20 million. It is possible that Lembergs may become the second largest loser in this ‘transit war’.