Rafineria Gdanska deal threatened by Treasury backing for PKN Orlen tie-up

The sale of Poland's second largest refiner, Rafineria Gdanska (RG), to a foreign firm appears doomed, with a State-backed drive for an all-Polish merger with PKN Orlen set to take priority over regional consolidation. The fate of the long-running $1 billion RG deal is to be decided in the coming days. But a private investment group led by the UK's Rotch Energy, fro nt-runners to buy RG, has struggled to find financing guarantees for their equity bid and investment plans, while alternative buyer, MOL of Hungary, reportedly offered too modest a price. The Treasury has said it will push for a tie-up between RG and refining and fuels group PKN Orlen if Nafta Polska, the State agency handling the privatization of the Baltic Coast refiner, deems the sale to have collapsed. "The deal will most likely be canceled and then, if the State brings Gdanska and PKN together, this will definitely decrease the chances of finding a partner for PKN anytime soon," said Tamas Pletser, analyst at Erste Bank in Budapest. The Treasury has already put on hold talks with MOL and OMV of Austria on the sale of a 17.6% stake in PKN Orlen. (Reuters)