"Rompetrol" is negotiating the "oil as debt payment" program

The delivery of fuel to the state is an alternative that the Kazakhs of Rompetrol are already negotiating with the authorities, in order to pay back their outstanding debt, of more than 500 million Euros.

However, their plan could be obstructed by a Government decree which recently limited capped fuel expenses, in an attempt to lower public budget spending.

The alternative of offering oil in service of the debt has been mentioned by the very representatives of "Rompetrol Rafinare" in their contestation of the Ordinance issued by the Romanian National Securities Commission at the end of July, which revoked the company"s right to delist from the Bucharest Stock Exchange, even though the Rompetrol Group, had accumulated a stake of 97% in the company. At the time, the CNVM invoked a note of the Ministry of Finance which mentioned that "delisting the stock would harm the interests of the Romanian state and that (....) the revenues made from a potential of the company"s stock, which the state would receive, would supply the national public budget..."

The management of "Rompetrol Rafinare" said that the statement about the potential earnings the state could make by selling the shares in the company was "premature", saying that such an operation was very unlikely: "An eventual sale of the stock obtained through a conversion of the bonds may not take place at all since there is a possibility they would be bought back on maturity according to the provisions of the Emergency Ordinance no.118/2003 and of the Bonds Issue Convention, or, on the other hand, due to the possible finding of an equivalent payment method, more specifically in the form of supplying via the delivery of fuel for a specific period of time", the contestation of the CNVM Ordinance states.

The stock market regulator yesterday rejected the arguments of Rompetrol, stating that there is a possibility of the majority shareholder of the company, the Rompetrol Group, lowering the size of its stake in the company following the conversion of the bonds into stock, which would no longer allow it to delist "Rompetrol Rafinare".

Until now, "Rompetrol Rafinare" paid only 54 million Euros out of the 570 million that it owes in service of the bonds issued in September 2003.

On Tuesday, the shareholders of "Rompetrol Rafinare" approved on principle the conversion into stock of the bonds which the state hasn"t redeemed before maturity, as well as the mortgaging of certain assets of the company, even though they have been placed under distress by the National Tax Administration (ANAF).