Having acquired 99% of Ventspils nafta stock, Vitol has been in a favourable position. The company can now consider optimization, notes Ventspils nafta Chairman Robert Kirkup. At the same time, he admits the company wishes there was more government support and protection. «I would like the government to help deal with the recent attacks we have suffered. These attacks do a considerable amount of damage to both business and Latvia’s economy,» – said Kirkup.
He admits the company would like to see an open and transparent tax system that would apply taxes to all companies in accordance with an equal system. «Why does a real estate tax rate of one company differ from that of another? Why do we have to pay more than other companies? Why do some companies have advantages and benefits and others don’t? This should not be acceptable. Even though the government sometimes tries to change this situation, it does not work all the time,» – said Kirkup.
The company’s head would like to see the process of issuing permits is carried out fairly. «Ventspils naftas terminals is the largest terminal in Ventspils and Baltic States. Why don’t we receive all the necessary permits? Why can’t we receive permits and build what we plan? Why are there active attempts to interfere with our business? It only hurts the state economy. Why cannot possible change this situation on our own. Why don’t want to enter politics. The government should help resolve these problems,» – said Kirkup.
Ventspils nafta also feels there is no support from Ventspils Municipality and Ventspils Freeport. «The government provides support in many situations. However, it would seem Ventpsils does not take national interests into consideration. This kills Latvia’s investment climate and impedes international investments. Latvia eagerly invites foreign investors to invest more money in our country, but it is very hard to convince the board of directors if investors do not receive support,» – said the head of Ventspils nafta. According to him, combating these problems is a major challenge. It is one of the reasons why Vitol has decided to acquire the second half of stock in Ventspils nafta. It was not done for financial reasons. «We don’t think the price was exceptionally favourable for us as many say,» – noted Kirkup.
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.
Kirkup notes that the price was much higher than the stock market’s price shortly before the deal.
He says Vitol looks at these investments as long-term business – in a 10, 20 or 30 years perspective. Looking at potential commitments in a situation where it is no longer possible to sustain the pipeline, dismantling costs would be enormous. Environmental costs and costs for pipeline management and terminal are also enormous. «We shouldn’t even mention the risk Vitol has taken by acquiring Ventspils nafta. But Vitol management had nonetheless considered these matters. In addition, Vitol has bought out minority shareholders’ stock. This is why the stock price should be viewed in the following context – commitments and minority shareholders’ stock,» – explained Kirkup.
He admits that Vitol’s advantage as a result of this deal is the opportunity to restructure the group and sell certain portions of the business. The negative aspect of the deal is the attacks made against the company in the press.
Ventspils nafta is one of the largest company groups in Latvia. It works in the field of oil product transport, shipping and storage. Ventspils nafta is the parent company. It manages investments in companies part of its group and assess the total value and growth potential of each individual company.
Ventspils nafta owns 51% of stocks in Ventspils nafta terminals, which is the largest oil and oil product handling terminal in Baltic States; 66% of stocks in LatRosTrans, which is a joint Latvian-Russian company in Baltic States; 49.94% of stocks in Latvian shipping company, which is one of the largest ship owners in the medium and handy-type tanker segment in the world.