Exclusive: The Government halts the trading of "Rompetrol" bonds on the stock exchange

• The stock market has been waiting for four years for the Government to issue a decision by which the bonds of "Rompetrol", issued against its debts towards the state budget, would begin trading on the exchange

• The measure would allow the government to earn money faster, but would have dispersed the creditors of "Rompetrol Rafinare"

The State could have recovered at least part of the money it is owed by Rompetrol Rafinare (formerly Petromidia) ever since 2005, had the Government approved a decision by which the bonds issued by the company against its debt of USD 603 million would be cleared for trading on the Bucharest Stock Exchange. We"re talking about the very law issued in April 2005, by which the debts of the former Petromidia were converted into bonds, provided that within six months the government would register the bonds issue with the Office for the Registration of Securities, to clear them for trading on regulated markets. However, the Government decree has yet to be approved, even though, at the end of 2005 the shareholders of the company voted in favor of the trading of the company"s bonds on the Bucharest Stock Exchange, and the Romanian Securities Commission issued a Directive in this regard. However, because the Government did not issue the decree it was supposed to, all of the above yielded no results. "Since that Government Decision never came out, everything was left hanging, and the bonds issue was not registered with the CNVM (ed. note: Romanian Securities Commission)", sources from inside the CNVM said for BURSA.

The measure would have allowed the state to quickly recover at least part of its debt, but at the same time it would have led to the dispersion of the creditors of "Rompetrol Rafinare". In other words, the state would no longer have been the only creditor of the company, since any investor, individual or company, would have been able to buy those bonds on the stock exchange.

The history of the bonds of Rompetrol Rafinare began in 2003 when the Năstase Government issued an Emergency Decree by which the historical debts of the Petromidia refinery were converted into bonds worth 603 million dollars, with an initial maturity of 20 years. The maturity was changed two years later, by way of the law no. 89/2005, to seven years, meaning the bonds would mature in September 2010.

Upon maturity, the law will allow "Rompetrol Rafinare" to choose between buying back the bonds from the state or converting them into stock. It is precisely this provision that sheds a different light on the decision of the previous Romanian governments to block the trading of bonds on the equity market, because if the company were to opt for converting bonds into stocks, then only the state would become a shareholder in the company.