UPDATE 2-Czech Unipetrol sells Kaucuk unit for 195 mln euros

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By Jan Lopatka

Czech oil processing group Unipetrol said on Tuesday it had agreed to sell its synthetic rubber unit Kaucuk to Poland's Firma Chemiczna Dwory for 195 million euros ($251.9 million).

Unipetrol, majority owned by Poland's PKN Orlen , has long been in talks on the sale of Kaucuk to Dwory, a strategic partner of PKN, as a part of its strategy to concentrate on refining, petrochemicals and fuel retail.

Unipetrol shares rose 1.3 percent to 237 crowns after the news, beating the PX index which were 0.1 percent lower at 1159 GMT.

Some minority shareholders of Unipetrol had questioned the pending deal saying Unipetrol management did not provide enough information on the divestment process.

Unipetrol said on Tuesday it had obtained three outside valuations of Kaucuk. Komercni Banka had estimated its value at 3.4 to 5.4 billion crowns, or 121 million to 191 million euros, while Deloitte estimated it at 4.2 to 4.6 billion crowns. A third opinion by VOX consultants put it at 4.4 to 4.7 billion.

"The price is fully in line with my expectation, I was expecting a price of five times mid-cycle EBITDA (earnings before interest, tax, depreciation and amortisation)," said Wood & Company analyst Bram Buring.

His evaluation suggested a price of 181 million euros.

"I think the price paid is moderately positive," he said, adding that further positive news was an agreement on future cooperation between the two firms.

Unipetrol's investments director Dariusz Marzec said the firm will book the sale as a 1.7 billion crown loss in consolidated 2006 results due to a lowering of the value of assets. The sale will, however, boost 2007 cash flow.

The firm expects the deal to close in the next six to nine months.

INVESTMENT OPTIONS

Unipetrol said it would use the proceeds for investments and debt restructuring.

Chief Executive Francois Vleguels said Unipetrol had strong interest in a 16.3 percent stake in refinery Ceska Rafinerska being put up for sale by ConocoPhillips .

Russia's LUKOIL is hoping to buy the stake but Unipetrol, a 51 percent owner of Rafinerska, has the right of first refusal.

Vleugels also told Reuters he sees a chance for a larger acquisition of a petrol station chain, but gave no details.

Unipetrol and Kaucuk, under the new owner, will split in half a 17.6 million euro fine levied by the EU on Kaucuk as a part of its steps against a cartel agreement of several European firms, Unipetrol said.

However, Unipetrol will book the entire fine into its 2006 result, pending settlement of the sale.

Unipetrol also said it had agreed to form a 51/49 joint venture with Kaucuk to build a new unit producing butadiene, which should start operating in 2010. The total investment into the unit is expected at 1.3-1.5 billion crowns.

(Additional reporting by Jan Korselt)

[PRAGUE/Reuters/Finance.cz]