The state looking to speed up the sale of its stake in "Petrom"

Due to a lack of money, the Government is rushing to sell its stake in the largest Romanian company - "OMV Petrom". The draft of the Government Decree elaborated by the Ministry of the Economy to approve the sale of 11.84% of the shares that the state still holds in "OMV Petrom" is scheduled for review in today"s Government meeting, sources from the ministry say. The public debate began three weeks ago.

According to our sources, the draft which will be reviewed by the Government did not see any changes, following the public: a package of 6,706,662,427 shares, managed by the Ministry of the Economy (11.84% of the share capital of "OMV Petrom", as recorded on May 31st 2010) will be sold in a IPO, on the stock exchange.

If the General Shareholder Meeting of "OMV Petrom" SA decided to increase the share capital of the company by contribution in cash, the Ministry of the Economy is entitled to sell its preference rights, which will also be done by public offering. As a result, the state will be left with just 8.8% of the shares of "Petrom", of which 8% are reserved for the company"s employees.

The same sources from the ministry have come due to the fact that Petrom did not pay any dividends these last two years and it doesn"t have the funds it needs to participate in the share capital increase of the company. Our sources say that the state is expecting the majority shareholder of Petrom, (the Austrians of "OMV") to make an offer. OMV recently said: "We already hold 51% of the share capital of Petrom. Because of this there is no immediate need to increase our stake in the company. We are however interested and we will notify any steps we may decide to take in the future".

What"s more, in its rush for cash, by the end of the year, the Government will solve the issue of the sale of Petrom shares to the company"s employees, as well as the sale of shares in the privatized divisions of "Electrica" SA to their employees. However, the Ministry of Justice did not approve the norms for the implementation of the sale, as it was wary of accepting the making of such deals by way of the unions, the sources said.

Investors have been waiting since 2004 for the approval of the norms for the sale of the shares of "Petrom" and of the privatized branches of "Electrica" SA to their employees.