OMV, the international integrated oil and gas company based in Vienna, has agreed to sell 100 per cent of the shares in its subsidiary OMV Petrol Ofisi, distributor of fuel products and lubricants, for 1.4 billion euros to VIP Turkey Enerji AS, a subsidiary of Vitol Investment Partnership Ltd.
The transaction is expected to close in the third quarter of 2017 at the latest, OMV said, but subject to conditions, including the relevant regulatory approvals.
“The original plan of integrating Petrol Ofisi into the value chain of OMV Group could not be realised,” said Rainer Seele, OMV chief executive officer. “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. ”
Based on the purchase price, OMV will record a further impairment of euros 186 million in its fourth quarter 2016 financial accounts. This booking is in addition to the impairment of euros 148 million recorded as of December 31, 2016 when OMV reclassified OMV Petrol Ofisi as "asset held for sale."
Upon closing of the transaction, a negative foreign exchange rate effect of approximately euros 1.1 billion has to be recorded in OMV Group net income, OMV said. This stems from the negative development of the Turkish Lira against the Euro since the acquisition of OMV Petrol Ofisi in 2010. This has no impact on OMV Group equity since corresponding foreign exchange translation effects were directly charged to Group equity in prior periods.
OMV Petrol Ofisi has 1,709 fuel stations and operates the largest retail station network in Turkey and is a leading fuels supplier to commercial and industrial customers. Total sales volume in 2016 amounted to 10.68 million tons. In addition, OMV Petrol Ofisi owns the largest fuel storage and logistics business in Turkey with a total storage capacity in excess of 1 million cubic meters. The company is also the largest distributor of lubricants in Turkey.