Ukraine to tender for refinery stake


Ukraine's state property fund said it will formally announce later this month a tender for a 67% stake in the Lysychansk-based LyNOS refinery. The fund failed in several earlier attempts to sell LyNOS, Ukraine's second-largest oil refinery.

The winner of the tender will have to supply LyNOS with 4.5 million tons of crude annually. A shortage of crude to process has recently kept many of the country's oil refineries idle for months. Ukraine now gets most of its crude oil from Russia.

The starting price for the stake has not yet been set, but the fund's head Oleksandr Bondar has pledged that the figure will be an attractive one. The refinery's heavy debt burden is the sole reason pushing down the price of the stake. The buyer will have to pay off $250 million in the refinery's debts, in addition to fulfilling other conditions attached to the deal.

Russia's Tyumen Oil has already announced it will bid for the stake and is regarded as the likely winner of the competition.

The fund also announced it will sell a stake in a smaller refinery by the end of this year. The sale of the stake�30% of the Halychyna oil refinery in western Ukraine�will be conducted via a tender, the SPF said.

And in another announcement, the fund extended the deadline for bids in the tender for a 25.22% stake in the huge turbine-maker Turboatom. The new date is May 17. The fund said Turboatom's managers are in talks with a strategic investor on their participation in the tender. The starting price of the stake is 56.8 million hryvnas.

Ukraine's State Property Fund is also preparing to sell the government's 76- percent share in a leading producer of oil pipes, with a starting price of 333.75 million hryvnas ($61.2 million), officials said last week. The fund said it will formally announce a tender for the purchase of the share package in the eastern Khartsyz Pipe Plant; it will be accepting bids until June 29.

The winner must offer the highest price and a concept for developing the plant, as well as have experience in metallurgy.

The plant is the former Soviet Union's only producer of large-diameter oil pipes with anticorrosion coating. Its 1999 production, according to Interfax, amounted to about 226,000 tons of pipes and represented a 23.7% drop from 1998. The government controls 76% of the plant's shares, and the rest belong to various businesses and private investors.

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