At the extraordinary general meeting of shareholders of KLAIPĖDOS NAFTA AB (KN) on July 18, KLAIPĖDOS NAFTA motioned to postpone the issue of investing into the subsidiary SGD Terminalas UAB until a new valuation of KN assets is made. It is argued that there is no legal and factual possibility of divesting the LNG terminal due to the fact that more than 6 months have elapsed since the KN asset valuation date and that a new KN asset valuation is required.
“Koncernas ACHEMOS GRUPĖ UAB is not convinced by these actions and the newly invented reason for postponing decision-making: the property valuation has allegedly expired. Oddly enough, however, it was ordered to be valid until July 1, while the shareholders’ meeting was convened on June 27. According to independent property appraisers, it would only take a week or two to prepare a new updated report, meaning it could be done before a second meeting of shareholders is convened on July 18. Accordingly, the ability to make the desired decision is in the hands of the Ministry of Energy, KN’s main shareholder, and KN,” says Mindaugas Deksnys, the CEO of ACHEMOS GRUPĖ.
“However, the Ministry of Energy is throwing all sorts of accusations at us, even though they are absolutely unsubstantiated – we are merely representing our interests and seeking to protect our rights as a minority shareholder of KLAIPĖDOS NAFTA. If the Ministry of Energy says that the unbundling of the LNG business is being carried out in a lawful manner, decisions could have been taken already at the first general meeting of shareholders of KLAIPĖDOS NAFTA and the shareholders would have been provided with all the requested information. We currently have a situation where hasty, unplanned and uncoordinated actions and disregard for the rights of minority shareholders are covered by good promises of tax cuts. We have also received the support of other minority shareholders, so it is obvious that we are not the only ones to have doubts about the legitimacy of such actions of the Ministry of Energy and KLAIPĖDOS NAFTA,” says Mindaugas Deksnys, the CEO of ACHEMOS GRUPĖ.
In the opinion of ACHEMOS GRUPĖ, the reorganisation of KN is being executed by way of spin-off and without complying with the legal requirements. “The Ministry of Energy and KLAIPĖDOS NAFTA could have prepared and coordinated the reorganisation plans in advance, 9-12 months prior, not in June. Especially since the Ministry of Energy started talking about the tax cut back in the summer of last year,” says M. Deksnys.
According to M. Deksnys, the reduction of tax is really important for ACHEMOS GRUPĖ, but it is necessary to evaluate not only the short-term benefits, but those that will occur in the long term as well. “According to publicly available information, about EUR 148 million will be spent on reducing the LNG terminal fee, stretching funding up to 2044. We all understand that this interest-bearing loan will have to be repaid by someone, therefore, the fee will not go away but will be spread over a longer period. The commitment to such a long-term decline in gas consumption in the country raises many serious questions about the economic prospects of such a plan,” says the CEO of ACHEMOS GRUPĖ.
We have been hearing the Ministry of Energy and other politicians speak about the reduction of the fee for maintaining the LNG terminal for some time already, but the reality and facts paint a different picture. This year, the tax for ACHEMA has increased by nearly 4 million EUR, up to EUR 23.5 million per year. This amount represents more than a quarter of the total maintenance costs of the LNG terminal. Last year, ACHEMA paid over EUR 20 million in the LNG terminal maintenance fee, which has amounted to over EUR 100 million and since 2013.
According to M. Deksnys, the Ministry of Energy requires that written guarantees be given in advance that decisions of the general meeting and State aid agreements negotiated with the European Commission are not appealed. The proposed alternatives also require that all complaints by ACHEMA be withdrawn. This would completely limit the ability of ACHEMOS GRUPĖ as a shareholder to defend its rights and represent its interests.
ACHEMOS GRUPĖ seeks to maintain the same shareholder structure of the separated company, the LNG Terminal, as currently exists at KLAIPĖDOS NAFTA. The Ministry of Energy, which is the major shareholder of KLAIPĖDOS NAFTA, must own 72.32 percent of the shares, ACHEMOS GRUPĖ will hold 10.41 percent, while minority shareholders will have a 17.27 percent stake. Under the current project of the Ministry of Energy, 100 percent of the shares of SGD Terminalas would belong exclusively to KLAIPĖDOS NAFTA.
Spinning off the activity of SGD Terminalas from KLAIPĖDOS NAFTA so that its shares belong to only one shareholder would violate the legitimate interests of other shareholders of KLAIPĖDOS NAFTA and their rights enshrined in the law. Likewise, such a separation of the SGD Terminalas from KN would make it impossible for the existing shareholders to enforce their property and non-property rights anchored in the Companies Act.
ACHEMOS GRUPĖ has appealed to the President Gitanas Nausėda, the Prime Minister Saulius Skvernelis, the Speaker of the Lithuanian Parliament Viktoras Pranckietis and the European Commission regarding the unlawful actions of the Ministry of Energy in the reorganisation of KLAIPĖDOS NAFTA AB and the violation of the shareholders’ rights. The second largest shareholder of KN asks the heads of the state to take action against the unlawful deeds of KN and the Ministry of Energy and to ensure legal compliance and respect of the rights of all shareholders of the company during the reorganisation of KLAIPĖDOS NAFTA.