Government Pardons All Petrom Debts

• Pardoned debts amount to some 2,000 billion ROL

• Petrom says it filed for debt pardon in October 2002

The Government has pardoned Petrom of all its overdue debts to the general consolidated budget through an ordinance passed secretly on April 1st. According to The Ministry of Finance the grand total of Petrom's overdue debts to The State was 1,741 billion ROL on December 31st, 2003. Petrom spokesman Gabriel Nastase told "Bursa" that this sum was not a debt per se, but penalties and interests accumulated on overdue excises. Governmental sources claim that investors interested in the privatization of Petrom had insistently asked that Petrom's debts be pardoned pending privatization. In fact, the seven shortlisted bidders for Petrom have also asked for an extension of the deadline set for the submission of final bids to April 16th, 2004. However, Gabriel Nastase claims that Petrom filed a debt pardon request with The Ministry of Finance back in October 2002, when the debts amounted to 671 billion ROL. In addition to and notwithstanding the foregoing, The Government has also pardoned 200 billion ROL worth of Petrom debts to social security, unemployment and healthcare budgets. Moreover, Petrom will also be granted a rescheduling of the payment of year 2000 and year 2001 dividends owed to The Ministry of Economy and Trade (its majority shareholder). The interests and penalties owed for the overdue dividends have also been pardoned. Through an exception to The State Aid Law, The Government mandated The Ministry of Economy to notify The Competition Council of this decision on behalf of the other State-controlled creditors as well. Competition Council sources say The Ministry of Economy did not report this form of State aid prior to the moment when it became effective, as it should have. The emergency ordinance in question also stipulates that all State-controlled creditors of Petrom are to terminate all foreclosure procedures initiated against Petrom and/or refrain from initiating such procedures in future.