Share capital increase for Petrom put on hold

• The shareholders have given special powers to he company"s Executive Board for a year allowing it to perform a share capital increase of up to s2.8 billion lei

Shareholders of "OMV-Petrom" (symbol: SNP) have decided in last week"s General Meeting of Shareholders to postpone the decision on the share capital until a subsequent Shareholder Assembly. The plan was to increase the share capital by incorporating several plots of land owned by the state and by requesting cash contributions from the holders of preference rights, according to a press release sent on Friday to the Bucharest Stock Exchange.

The decision comes as the Ministry of the Economy, which controls 20D% of the company, has requested the postponement of the share capital increase by 201.8 million lei, almost two weeks before the General Meeting of Shareholders.

The initial proposal was to increase the share capital by a maximum of 201.8 million lei, by incorporating several plots of land contributed by the Romanian state, with an estimated value of 41.6 million lei, and by contributions in cash from other shareholders.

In turn, the shareholders of the company have decided to empower the Directorate of "Petrom" for a year, to perform a share capital increase of up to 2.8 billion lei. The officials of the company have said that the share capital increase is needed to finance the investments of up to 1.5 billion a year scheduled for the next five years.

For 2010 alone, the company has budgeted 6.9 billion lei in investments, up 67% over last year, with the bulk of this amount being intended for Exploration and Production.

• A LLC company to handle the company"s marketing

"Petrom" shareholders have also approved, on principle, the spin-off of the assets and liabilities related to three business units of the Marketing Division of the company (OMV Petrom SA, OMV Petrom Marketing SRL and M.P. Petroleum Distribuţie SRL) to OMV PETROM Marketing SRL. The latter will handle the marketing activities of Petrom which were previously handled by the three companies. The Company"s effective spin-off will be subject to approval by a subsequent Extraordinary General Meeting of Shareholders.

• The head of "Franklin Templeton" joins the Supervisory Board of Petrom

The shareholders of "Petrom" have approved the proposal of the management of the Proprietatea Fund to appoint Mark Mobius, the chairman of "Franklin Templeton Investments Management", (which will manage the Proprietatea Fund),

join the Supervisory Board of Petrom. Mark Mobius will replace Daniel Costea, the former representative of the Proprietatea Fund. According to the management of the Fund, Mark Mobius himself requested to be appointed on the Supervisory Board of Petrom, as he had announced some time ago that he wanted to have a say in the running of the companies in which the Proprietatea Fund has stakes in.

The Proprietatea Fund owns a 20% stake in "Petrom", which makes it its largest holding.

The Supervisory Board of Petrom is made up of nine individuals which were appointed for four years by the General Assembly of Shareholders.

The Supervisory Board appoints the Executive Board and supervises the business behavior of the company"s management, according to information on the company"s website.

The shareholders of the company last Thursday approved the proposal of the company to pay no dividends for the second year in a row.

The company has a market capitalization of 18.4 billion lei, according to the price of 0.325 lei/share of April 28th. Last year, the company had a net profit of 1.36 billion lei and a turnover of 12.84 billion lei.