Fiscal Authority seizes Rompetrol Rafinare's assets over historic debt

Oil company Rompetrol Rafinare's assets and its participations in subsidiaries have been seized by the Romanian Fiscal Authority (ANAF) in an attempt to recover a USD 570 million debt and prevent the alienation of these assets. The company's main asset is the Petromidia refinery. According to Rompetrol, the decision has ignored legal and contractual statements and locks assets for an amount Rompetrol Rafinare has never owed to the state budget. The decision from ANAF does not affect Rompetrol Rafinare's activity but creates prejudices to the company's image, Rompetrol said. “Rompetrol does not intend to sell these assets. Between 2007 and 2010, the Rompetrol group's investment program reached over USD 1, with billion 1.8 billion financing from the majority shareholder KazMunayGas. The company says the measure was out of ANAF's range of activities, being unjustified and abusive. Rompetrol Rafinare issued bonds acquired by the Romanian state, which covered for the debt and the interest the company had before the privatization. The bonds which are not recovered can be turned into shares on September 30, 2010. Rompetrol says it has respected the law and the bond conversion and has asked for a general extraordinary meeting to approve the conversion into shares for all the bonds which were not yet recovered. Rompetrol Rafinare's payments on account of the debt will have reached USD 310 million on September 30. According to Rompetrol, around 40 percent of the value of the bonds represents interest and penalties calculated in 2003, which means the company paid interest to interest during the seven years. The loan payment, which is due at the end of September this year, stems from Petromidia’s refinery debt from 2003, which was converted under the then Government into seven-year maturity bonds, which now need to be repaid, or else they will be converted into shares. This would give the state the control over the Petromidia refinery, now owned by Rompetrol Rafinare, part of Rompetrol Group. Rompetrol Group is currently owned by KazMunayGaz, which took it over from businessman Dinu Patriciu in 2007. However, the state said it didn’t want the control over Rompetrol Rafinare, according to Dmitry Grigoryev, Rompetrol’s financial director. romania-insider.com