Chinese group fails to take over Romania’s biggest oil refinery

The deal between Chinese group China Energy Company Limited (CEFC) and Kazakhstan’s state oil company KazMunayGas, which targeted a majority stake in KMG International, the former Rompetrol group, fell through, KMG International announced on Tuesday, July 3. KMG International controls the biggest oil refinery in Romania – Petromidia and has the second-biggest fuel distribution network in the country. CEFC reached an agreement with KazMunayGas to take over 51% of KMG International in December 2016. In July 2017, the Romanian authorities greenlighted the transaction. However, the deal was never completed as the Chinese group was confronted with big financial problems at the beginning of this year. In February, the Chinese authorities started an investigation targeting suspected economic crimes committed by CEFC chairman Ye Jianming and the group faced a liquidity crisis. According to KMG International, the long-stop date by which the parties were to obtain all the conditions for completing the deal expired on June 30 and was not extended. The decision has no impact on KMG International’s operations, the group announced. KazMunayGas will continue to support the group’s operations. KMG International increased its gross turnover by 40% in the first quarter of this year, to USD 2.76 billion, and its net profit by 70%, to USD 8.5 million as its refineries and petrochemical division in Romania processed more raw materials. editor@romania-insider.com