State re-becomes shareholder in Rompetrol Rafinare after company passes on cash redemption

The Romanian authorities Thursday rejoined the shareholder structure of oil refinery Rompetrol Rafinare (RRC.RO on the Bucharest Stock Exchange) with a 44.69 percent stake, after the latter failed to redeem in cash a EUR 540 million convertible hybrid held by the government on account of a historic debt. Rompetrol Rafinare decided to convert most of the hybrid into shares instead, the oil company said in a statement. The company approved a EUR 462 million capital increase to EUR 1 billion. Rompetrol Rafinare will issue 20.65 billion new shares with a face value of RON 0.1118 each. Rompetrol Rafinare, owned by Dutch-based Rompetrol Group, was supposed to repay the Romanian authorities a historic debt of EUR 570 million by September 30. The debt was issued by Petromidia refinery in 2003 and was converted into seven-year bonds by government decision. On September 10, Romania's tax authority ANAF seized several plots of land, facilities, and subsidiaries' shares owned by Petromidia as security until the company repays its debt to the state. Subsequently, Standard & Poor's Ratings Services cut its long-term corporate credit rating on Rompetrol Group to 'B' from 'B+' and placed the rating on CreditWatch with negative implications, citing political risks. Rompetrol Group is currently owned by KazMunayGaz, which took it over from businessman Dinu Patriciu in 2007. Rompetrol Rafinare, which ons Petromidia refinery, deals with the group's refinery activity. Mediafax