At the current bourse price, the government would raise another about EUR300 million from the sale of shares.
The capital increase approved by Rompetrol Rafinare shareholders on September 30, 2010, which converted the bonds owned by the government into shares so that the Finance Ministry became a shareholder with a 44.6% stake in the company, was registered with the Trade Registry Office affiliated to the Constanta Court of Law on July 15, according to a report Rompetrol send to the Bucharest Stock Exchange.
In the wake of this operation, the Government again officially became a shareholder in Rompetrol Rafinare (Petromidia) after eleven years.
Kazakhstan’s KazMunaiGaz, holding the majority stake in
Rompetrol group, in August 2010 paid the state EUR55 million to
repurchase part of bonds, and converted the rest, worth EUR516
million, into stock. This way, the Kazakhs kept the majority
stake.
The Constanta Court ruled the operations were legal and that the
capital increase could be registered with the Trade Registry.
The Government still has ways to challenge the ruling, though. The capital increase has not been yet registered with the Central Depositary, so that the official number of shares has not changed. This requires the approval of the National Securities Commission (CNVM). The Government may sell its shares only after registration with the Central Depositary.
In case higher courts support the ruling of the Constanta Court, the Government will have to find a way to recover its money from the sale of shares. Among available solutions is the sale of the stake to the Kazakhs or the sale through a public offering on the bourse.
The sum the Government will recover depends on the share price.
Should the shares be sold at the current price of RON0.065/share, the Government would raise around EUR302 million, EUR214 million less than the value of converted shares.
To recover the entire sum, amounting to EUR516 million, the Government would have to sell its shares at the price of RON0.111/share, 70% above the current price.
The Government can, of course, commission an independent assessment report to determine the fair share price, but it is unlikely to get a price of above RON0.1, as the company has reported significant losses over the past three years.
With the registered capital increase and at the current share price of RON0.0651, Rompetrol Rafinare’s capitalization would amount to EUR700 million. Petromidia would thus become the fourth company on the bourse by value, after Petrom (SNP.RO), BRD (BRD.RO) and Fondul Proprietatea (FP.RO).
(English version by Catalina Apostoiu, editing by Loredana Fratila Cristescu)