Pryvatbank Decides Not To Sell 33% Of Galychyna Refinery.

Pryvatbank has decided not to hold an auction for 33% of the shares in the Galychyna Refinery (HANZ). Despite the fact that the ban on holding the auction was removed, the owners of the 33% stake have abandoned their plan to sell the shares. Concorde Capital: This news confirms our belief that Pryvat has already taken control of Galychyna (see our Analyst’s Notebook Report from January). It is unclear though, what Pryvat is going to do with the asset. We don’t think that selling it to Ukrnafta (UNAF: HOLD) is a likely, as the rearrangement of Ukrnafta’s oil supply to Galychyna may hurt Pryvat’s other refinery, Naftokhymyk Prykarpattya (NAFP) (Ukrnafta supplied 83% of the crude NAFP refined in 2005). Moreover, we doubt Ukrnafta would have much interest in buying both of Pryvat’s refineries – it doesn’t have enough money or enough crude to supply both refineries. WATCH for Galychyna to draw interest from a European/CIS oil major.