Austria’s OMV sells Turkish oil retailer Petrol Ofisi to Vitol for $1.45 bln
VIENNAAustrian oil and gas group OMV has announced the sale of its Turkish subsidiary Petrol Ofisi to Swiss oil trading giant Vitol for 1.368 billion euros ($1.45 billion).
“This is a strong business in a growing market. We... greatly look forward to working with the Petrol Ofisi team to capitalize on Turkey’s strong economic performance and growing demand for energy products,” said Vitol Chief Executive Ian Taylor.
Saudi Aramco and the State Oil Company of Azerbaijan (SOCAR) had also placed bids for Petrol Ofisi, sources familiar with the matter said. OMV counted the Turkish petrol station chain as one of its non-core assets it is shedding to generate cash.
OMV had put its Turkish subsidiary up for sale a year ago in the context of plunging crude prices that depressed the global oil sector.
“This stems from the negative development of the Turkish Lira against the Euro since the acquisition of OMV Petrol Ofisi A.S in 2010. This does not affect OMV Group equity since corresponding currency exchange translation effects were directly charged to OMV group equity in prior periods.”
The transaction, which is subject to regulatory approval, is expected to be finalized by the third quarter of this year at the latest, the Austrian group said in a statement on March 3.
As a result OMV will record a depreciation of 186 million euros in its results for the fourth quarter of 2016, in addition to the 148 million euro depreciation booked at the end of December for the sale of the subsidiary.
The group also indicated that its 2017 results will be hit by a negative exchange rate effect of 1.1 billion euros, linked to the plunge in the Turkish lira.
“The original plan of integrating Petrol Ofisi into the value chain of OMV Group could not be realized.
Therefore, the decision to sell the company was the right and necessary step in the course of implementing our corporate strategy.
“In light of the challenging environment, I am pleased that we successfully concluded the negotiations,” group CEO Rainer Seele said in a statement.
Like other OMV subsidiaries, Petrol Ofisi has suffered severe depreciations in recent years and has been hit by controls on oil profit margins by the Turkish regulator.
Turkey has some of the highest fuel prices in Europe but taxes and other regulations.
OMV, which employs 24,500 people, announced in mid-February a net profit of three million euros for the year 2016, after a net loss of 1.15 billion euros in 2015, but with a net deficit of 145 million euros in the fourth quarter due to negative non-recurring items of 415 million euros.