Klaipedos Nafta - Notification on material event

Invitation for the interested investors to acquire shares of UAB LITGAS controlled by AB Klaipėdos nafta

Reason for Sale

In order to implement unbundling of the activities in the natural gas sector,
the European Commission recommended National Commission for Energy Control and
Prices to certify AB Amber Grid as the transmission system operator on the
condition that all shares of UAB LITGAS controlled by AB Klaipėdos Nafta
(hereinafter - the Company) would be transferred. The Board of the Company,
taking into account the above considerations, decided to organize the sale of
company-owned shares of UAB LITGAS. In order to guarantee objective and
transparent sale of the shares of UAB LITGAS controlled by the Company, as well
as to ensure maximum benefit to the Company and all its shareholders, the
Company is planning to execute share sale by carrying out public procedures
(i.e. public offering for the participants of the market). The Company invites
interested potential buyers to submit primary non-binding applications by
expressing an interest to participate in the purchase of shares. 

Number for Shares

Currently the Company owns 33.3% of the UAB LITGAS shares, the rest 66.7% is
owned by “Lietuvos energija”, UAB. UAB LITGAS shares controlled by the Company
(1/3 of the authorized capital) consists of 15 000 000 ordinary shares of 0.29
euros of nominal value of each.  Potential buyers can purchase only the total
number of the proposed shares (number of shares is indivisible). 

Activity of UAB LITGAS

UAB LITGAS is natural gas supply and trading company, whose main activity is
the supply of natural gas via Klaipeda liquefied natural gas (LNG) terminal,
necessary for the minimum continuous operation of the terminal. UAB LITGAS is
operating after winning the competition organized by the Ministry of Energy and
was approved as a designated supplier for 5 (five) years period. As the
designated supplier UAB LITGAS is a company of strategic importance to the
national security. 

In addition to the activity of the designated supplier, UAB LITGAS also plans
to become a competitive player in the market of region's natural gas and LNG
supply, by engaging in the growing bunkering activities - LNG supply as fuel to
vessels. The company has signed non-binding LNG trade agreements with 15 global
suppliers, which together provide more than half of the world's LNG. These
agreements provide opportunities to UAB LITGAS for the fast purchase of the gas
at the international spot markets. 

Important information

Considering public notice of “Lietuvos energija”, UAB, the shareholder of UAB
LITGAS, announced on 5th May 2015, “Lietuvos energija”, UAB plans to reorganize
UAB LITGAS by merging it to UAB “Lietuvos dujų tiekimas” by the end of this
year[1]. 

Requirements for the Potential Buyers

According to the Article 11.2 of the Law of the Republic of Lithuania on
liquefied natural gas terminal, UAB LITGAS is a company of strategic importance
to the national security. Due to this the potential buyers of the shares would
have to meet the requirements of the Law on Enterprises and Facilities of
Strategic Importance to National Security and Other Enterprises Important to
Ensuring National Security, and their compliance with the national security
interests will be evaluated by the Commission for the evaluation of compliance
of potential buyers to the national security interests (Commission) which shall
be formed by the Government of the Republic of Lithuania. Potential buyers must
submit the agreement to be inspected by the Commission and the documents set in
the Commission's Rules of Procedure[2]. If a potential buyer refuse to give
consent to be inspected and / or the necessary documentation, such potential
participant loses the right to participate in the purchase of UAB LITGAS
shares. Potential buyers, who comply with the requirements of the above
mentioned law on a day of submission of non-binding applications and provide
documents evidencing the compliance, shall not be examined additionally. 

Following the unbundling requirements of the activities in the energy sector,
the potential buyer cannot be a company which is directly or indirectly
controlled by the Ministry of Energy. The potential buyer shall also meet the
requirements of unbundling set forth in the Section 8 of the Law on Natural
Gas. Together with a non-binding application potential buyer must submit
evidence substantiating its compliance with the abovementioned requirements. 

Company, UAB LITGAS and “Lietuvos energija”, UAB have signed a shareholders
agreement, therefore the potential buyer who offers the highest price and wins
the tender, will take over the rights and obligations of the Company set forth
in the shareholders agreement. This agreement will be available for a potential
buyer after the compliance to the requirement set in the Law on Enterprises and
Facilities of Strategic Importance to National Security and Other Enterprises
Important to Ensuring National Security is performed and confidentiality
commitment is signed. 

It is also necessary to note that in case a potential buyer, which is not
directly or indirectly controlled by the Republic of Lithuania, offers the
highest price for the shares of UAB LITGAS, current existing shareholder
“Lietuvos energija”, UAB will have a preferential right to acquire the shares
for that price. 

Acquisition of the Shares

Currently the purchase of shares evaluation service is in progress. Evaluation
of the shares will be performed by an independent assessor who has experience
and a valid license for provision of the services. Potential buyers who have
submitted applications to participate in the procurement of the shares and
proved their compliance with the requirements of the Law on Enterprises and
Facilities of Strategic Importance to National Security and Other Enterprises
Important to Ensuring National Security, have signed confidentiality
obligations and have become familiar with UAB LITGAS shares' evaluation report
and the shareholders agreement, will be invited to provide price proposals. The
Company plans to sell the shares of UAB LITGAS for not less than a price stated
in a report of the independent property assessor. 

Application Terms and Deadline

Potential buyers are invited to submit a free-form non-binding applications by
29 May, 2015, to Gedimino av. 33/17 - 2, 01109 Vilnius, or by e-mail
M.Burokas@oil.lt . If you have any questions, you can contact us by phone +370
618 16543. 

Relevant Documents of UAB LITGAS

Appendixes to the invitation:

Copies of UAB LITGAS financial statements of 2013 and 2014 (in Lithuanian), can
be found on address http://litgas.lt/apie-mus/ataskaitos/ 

[1] Further information:
http://www.le.lt/index.php/naujienos/pranesimai-spaudai/litgas-ir-lietuvos-duju-
tiekimas-jungiami-i-viena-imone/1547 

[2] Resolution No. 1540 of the Government of the Republic of Lithuania, dated
25 November 2009. 




         Marius Pulkauninkas, Director of Finance and Administration
Department, tel.: +370 46 391 763.