The Ekonomichna Pravda publication reported the upcoming deal, citing its own sources.
The publication emphasizes that this transaction means much more than just the sale of a large asset. Pinchuk will leave Geo Alliance together with his partner in this business – Dutch Vitol group, the world's largest hydrocarbon trader owned by Ian Taylor, and his exit from the Ukrainian market is a negative signal to potential Ukrainian investors.
The Geo Alliance includes 16 fields. In 2012, a partner appeared in Pinchuk’s gas business: a 25% stake in Geo Alliance was purchased by Vitol Group (Netherlands), the largest oil trader in the world, which minimum annual revenue is $ 150 billion. And in 2017 Vitol increased its stake in Geo Alliance to 50%.
Although one of Pinchuk’s business partners refutes the message about the sale of the business, Ekonomichna Pravda publishes three arguments in favor of its version:
Firstly, the decision to sell the Geo Alliance is being considered by Pinchuk in parallel with the sale of the second "non-key" business – Credit Dnipro Bank.
Secondly, the Geo Alliance is being sold upon agreement with Vitol. Thus, we are talking about the sale of 100% of this gas business.
Thirdly, Geo Alliance is estimated at $ 300 million by Pinchuk’s associates, but Vitol, as the entire domestic market, consider this price as frankly overestimated. According to the source of Ekonomichna Pravda, in order to justify the declared value, the founder of EastOne undertook to pump his gas business up with new assets.
If the information turns out to be true, then the exit of the Dutch group from the market may symbolize another round of crisis in the domestic gas industry, caused by fuel prices crash.
Geo Alliance is a group of companies that is one of the largest in the gas output and gas condensate production market.