KazMunayGas to pay USD 200 mln for part of Romania's stake in Rompetrol, create joint fund for energy investments

Oil and gas company Rompetrol and the Romanian state recently finalized the last details of the deal which settles the dispute over the Rompetrol Rafinare historic bond conversion. Rompetrol will pay USD 200 million to take over 26.6 percent of the shares, and the Romanian state will stay a significant shareholder in Rompetrol Rafinare, with 18 percent, for three years. After this period, the state will be able to sell its package via a privatization procedure. According to the Romanian Government, the price paid by the Kazakh company for the share package exceeds by far the market value of the package. “In 2012, the 26 percent share package was worth some USD 80 million based on stock market prices,” according to the Government. The recently agreed law stating these measures will be sent to the Parliament for approval. In addition, Rompetrol's main shareholder KazMunayGas will create, together with the Romanian state, an investment fund of some USD 1 billion. The seven – year maturity fund, created as a company incorporated in Romania, will be controlled by Rompetrol – 80 percent participation, with the Romanian state holding the remainder. The Rompetrol group and its main shareholder will guarantee financing the fund, and will also cover Romania's participation in the fund's social capital. This fund aims at consolidating the activities and operations within Rompetrol, diversifying crude oil supply for both Romania and the EU, create new jobs and help attract new investments, according to Rompetrol. The Romanian state re-became a shareholder in Rompetrol Rafinare in 2010, with a 44.69 percent share package, following the conversion of the bonds issued by the company in 2003, on account of a historic debt. The group managed to pay off some USD 71 million worth of bonds. KazMunaiGaz bought 75 percent in Romania- based Rompetrol from its former owner, Dinu Patriciu, in 2007. It bought the remaining 25 percent in 2009. The company has been part of a legal fight with the Romanian state over an alleged unpaid debt of some EUR 570 million steming from the bonds conversion. At the time, the quarrel ended up with Rompetrol giving the Romanian state a stake of 44.7 percent in the refinery on account of a portion of the debt. In 2012, Rompetrol Rafinare paid USD 1.3 billion worth of taxes to the Romanian state, which makes it one of the largest tax payers in the country. It employees around 7,000 people in Romania. editor@romania-insider.com