OMV Petrom starts delisting global depository receipts from the London Stock Exchange

OMV Petrom (SNP), the largest oil producer in Southeast Europe, is starting the process of delisting its global depository receipts (GDRs) from the London Stock Exchange, according to a company report published yesterday on its website of the Bucharest Stock Exchange (BVB).

The delisting of global deposit certificates had been approved by OMV Petrom shareholders in April this year. "The GDRs were admitted to trading on the Main Market (n.r. of the London Stock Exchange) on 20 October 2016. At that time, listing on the London Stock Exchange was considered for the company to have access to a higher by investors and also due to low liquidity and accessibility limitations on the Bucharest Stock Exchange," the report states.

The document adds: "Since then, there has been a steep reduction to approximately 5% of the initial volume of GDRs issued on the listing date, which the company interprets as showing low investor interest in GDRs, particularly since with 2019, which also corroborates with an increase in investor interest in the Bucharest Stock Exchange".

According to the report, compared to 2018, the traded value of GDRs decreased in 2022 by 97% to $0.3 million or $1,250/day on average. As of July 31, 2023, the volume of GDRs outstanding represented only 0.03% of the company's share capital, with a capitalization of GDRs of only $2.3 million. The evolution of the Bucharest Stock Exchange over the years, the inclusion of the company in the FTSE Russell Emerging Markets indices and the issuer's market making services contracted by the company starting from September 2021 have made the shares traded on the Bucharest Stock Exchange more attractive, from the point of view of from a liquidity point of view, compared to GDRs traded on the London Stock Exchange.

"Given this factual situation, as well as the ongoing administrative and regulatory compliance costs that the company incurs as a result of its listing in London, the company does not identify a relevant benefit in maintaining such a listing," the report states .

In these circumstances, an application has been submitted to the Financial Conduct Authority for the delisting of the GDRs from the Official List of the Financial Conduct Authority and to the London Stock Exchange for the cessation of trading of the GDRs, both with effect from 26 October 2023. "The last day of trading of the GDRs on the London Stock Exchange is expected to be 25 October 2023. The cessation of listing and trading of the GDRs on the London Stock Exchange is expected to take effect at or around 8:00 a.m.: 00 a.m. on October 26, 2023", according to the OMV Petrom report.

For the first half of the year, OMV Petrom reported a net profit down 80%, to 944 million lei, compared to the net result of 4.646 billion lei recorded in the same period last year.

The Austrians from OMV own 51% of OMV Petrom, while the Romanian State, through the Ministry of Energy, has 20.64% of the oil and gas producer.