"Rafo" dodges the bankruptcy bullet

• A decision of the Court of Braşov puts the state aid option for the refinery back on the table

• "Rafo" returns to business after almost five and a half years since entering judicial reorganization

The court of Braşov has denied the request for the bankruptcy of "Rafo" Oneşti, as announced yesterday by Bogdan Paraschiv, the head of the team of lawyers of law firm "Boştină şi Asociaţii", which represented the company of Oneşti in court.

The court of Braşov ruled the closing of the reorganization procedure, which will allow the company to return to business.

The trustee in bankruptcy of "Rafo", Florin Dragomir, said for BURSA that the Court ruling is definitive and binding, but not irrevocable, as it can be appealed. After the official announcement of the ruling gets, the trustee in bankruptcy will be officially discharged of its duties, and the company will get back its full rights to do business.

The decision of the Court of Braşov also has a significant effect on the company, because it brings back the issue of the state aid which was approved and was scheduled to allow the company to take a loan which it would use for retooling. The state would guarantee up to 80% of the loan. The management of "Rafo" has begun negotiations concerning the loan with four banks, but they were not completed because of the reorganization. "Rafo" needs 330 million Euros to allow it to switch from producing gas to petrochemical products.

A press release by Law firm "Boştină şi Asociaţii" states that after 11 days of deliberation, on June 21st, the Court of Braşov issued the ruling dismissing the objections, memorandums and contestations filed against the report of the trustee in bankruptcy concerning the termination of the reorganization procedure and the , ruling they were inadmissible, and has dismissed as unfounded the oppositions, objections, memorandums and contestations concerning the proposal to end the reorganization procedure and acknowledged that the refinery of Dărmăneşti relinquished the trial of the contestation.

According to the legislation in effect, reorganization is a procedure which is used to allow corporate debtors to pay off their debts according to a schedule. The legal reorganization procedure ends by court ruling, following the honoring of all the payments specified in the reorganization plan validated by the bankruptcy judge.

At the end of last year, the Court of Braşov rejected the contestation submitted by "Glencore Energy" - the crude supplier of the refinery - as part of the lawsuit of "Rafo" Oneşti, to the second request for the admission of the receivable of 4.1 million dollars representing, according to the British company, the equivalent of 6,920 metric tons of diesel oil.

"Rafo" Oneşti entered bankruptcy in 2004, being the largest debtor to the state budget at the time. In 2007, the Authority for State Assets Recovery (AVAS) removed the pledge set up on the shares of the refinery, due to the performing of the investments commitments undertaken through the privatization contract.