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. Last Updated: 07/27/2016

LUKoil Abandons Bid for Croatia's Ina

ZAGREB, Croatia -- LUKoil has withdrawn from the race for 25 percent of Croatian state oil company Ina, but the sale will continue with the three remaining bidders, an Ina official said Monday.

"LUKoil is out. We have received an official letter from the company informing us they are withdrawing from the bid," the official said, declining to say why the Russians withdrew.

LUKoil was one of the five companies shortlisted by the government as potential buyers in July, together with Austrian OMV, Hungarian MOL, Rosneft and Italy's Edison Gas group.

The first three have completed due diligence in Ina, while the government rejected Edison Gas last week, citing its disagreement with a consortium Edison formed with Greek Hellenic Petroleum.

"The privatization will continue as planned," the official added.

LUKoil has bid aggressively for assets overseas in recent years, investing in the United States and North Africa as well as Europe.

The company has been criticized for its seemingly haphazard investment strategy and in August its chief executive said the company would consolidate its global assets rather than continue with acquisitions.

The company may also be distracted after Sergei Kukura, its first vice president and chief financial officer, was kidnapped in Moscow.

The government expects binding offers for Ina, which has two refineries and potential to expand its retail business in the Balkans, by the end of the year.

The sale is expected to be completed in the first quarter of 2003.

The buyer will have to invest up to $360 million to bring Ina's two refineries up to European standards and keep all of its 17,000 work force and oil fields for a period of three years.

Ina has been valued at 1.2 billion to 1.8 billion euros ($1.18 billion to 1.77 billion) by advisers Deutsche Bank and PricewaterhouseCoopers.