Gaz de France Refused to Bid for Lietvos Dujos Gas Concern

Gaz de France refused to bid against E.On and Ruhrgas German companies for the status of a strategic investor in Lietvos Dujos Lithuanian gas concern, which is being currently privatised. As the Lietuvos rytas informed, today is the cut off date to place the bid with the Lithuanian State Property Fund for the 34% of Lietvos Dujos's shares and to present the investment plan, and German companies intend to enter the auction. One of the Gaz de France representatives confirmed today that they are not satisfied with how the prices were set, considering the used method discouraging for further investments in Lietvos Dujos and the payback period too long. The French also do not agree with the strategy of dividing the shares for sale equally between investor and supplier - 34% to each, believing this might lead to serious conflicts between shareholders. In addition, Gas de France is concerned about financial strength of Lietvos Dujos, considering the company's borrowing potential nonexistent.

Ruhrgas's representatives upon their arrival to Lithuania last week were outraged by the number of other gas providers on the market, limiting Lietvos Dujos's competitive advantage. They also consider the company's management dissatisfactory.

A short while ago the World Bank suggested Lithuania grant to the Lietvos Dujos's strategic investor rights identical to those of an investor with 51% of the shares. Currently, the State owns 92.36% of the shares, Lietvos Dujos's equity being $29 million. The winner of the bidding will be announced in April or May, and the contract will probably be signed by the end of June.