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EBRD takes stake in Romanian oil giant Petrom
Bank’s debt to equity swap will benefit country’s largest company
For more than a decade, the EBRD has supported the transformation of Romanian
oil giant Petrom from a state-owned company in dire need of reform into the
country’s largest business, now 51 per cent-owned by Austria’s oil and gas
company OMV.
The Bank is continuing that support by converting up to $73 million of its
outstanding debt for an equity stake of around 2 per cent in Petrom. The
EBRD’s presence will contribute to the success of one of the largest
privatisations in south-eastern Europe, at the end of which around 60 per cent
of ownership will be in private hands. The Bank’s presence should also ensure
continued transparency of the privatisation process, as well as protection for
minority-shareholders rights, which includes local employees. The government
currently holds a 40.74 per cent stake in Petrom.
Peter Reiniger, Business Group Director for Energy at the EBRD, said this
project has been crucial for Petrom and Romania. Over the years the Bank has
helped reform the company – establishing an integrated oil and gas business,
providing finance to modernise its refineries, and improving company
transparency for example – to support its eventual privatisation, Mr Reiniger
said. Earlier this year, OMV agreed to purchase a majority stake, making it
Romania’s largest privatisation to date. This latest privatisation, which has
been carried out in an open and transparent manner, outlines the Bank’s
successful role in promoting large-scale privatisations, which can not only
improve a company’s efficiency and profitability, but also generate
significant funds for state coffers.
Based in Bucharest, Petrom produces approximately 6 million tonnes of crude
oil and 6 billion cubic meters of natural gas annually, and has a network of
around 600 petrol stations throughout the country, representing about 40 per
cent of the market share. This latest deal builds on 12 years of cooperation
between the EBRD and Petrom. In 1992 the Bank lent the then only oil producing
company €28 million, followed in 2002 by $150 million pre-privatisation loan,
co-financed with the Black Sea Trade and Development Bank and five commercial
banks.
Dorin Mucea, Head of the Office of State Ownership and Privatization in
Industry said: “The EBRD’s participation in Petrom has contributed to its
overall improvement and successful privatisation. These are all necessary
conditions for Petrom to become stronger, more efficient as well as more and
more significant on the petroleum market by belonging to a large and important
international structure.”
OMV has become more and more active in Romania in recent years, with an
initial 60 petrol stations spanning the country. OMV’s recent acquisition in
Petrom is the largest privatisation involving an Austrian company.
Wolfgang Ruttenstorfer, CEO of OMV said: "OMV welcomes the engagement of EBRD
in Petrom and is looking forward to further cooperation with the Bank as a
shareholder with renowned expertise of the company and the region. As a member
of the OMV group, Petrom will hold a significantly stronger position, and the
OMV group has a strong base for the future expansion of its leading position
in Central Europe."
The EBRD is the largest investor in Romania, having committed more that €2.5
billion in some 125 projects in difference sectors across the country.
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