Businessman Dinu Patriciu has finally got the $603 million debt issue at Petromidia fixed for the next 20 years, while the State gets bonds in return.
Petromidia is to issue bonds dated September 30, 2003. This way, the historical debts of the refinery will be extinguished. Actually, the State has opted for a special rescheduling of Petromidia's debts over a 20-year period during which the company's balance sheet will be budgetary debt-free. The bonds will be issued in euros and have the par value set at 25 euros. The interest of the bonds is equal to the 12-month EURIBOR rate plus a 1.5% margin paid every year.
In case Petromidia's annual profit rate is higher than 10%, the interest margin will go up to 2% above 12-month EURIBOR rate. The bonds will fall due in no more than 20 years, but the exact maturity is to be set in the issue convention. The Government will later be able to approve the trading of the bonds on the market, under the regulations endorsed by the National Securities Commission (CNVM). Petromidia will be allowed to repurchase the bonds at the par value. The convention will also include the option for swapping the bonds for shares.
Petromidia's debts to the budget by September 30, 2003, amounted to $603 million, $394 million of which accounted for the principal, $191 million for the interests and $13 million for penalties.
"The debts, contracted before the privatisation and made worse by the accumulation of penalties and burdensome interests, were not possible to pay any other way. On the other hand, selling the bonds held by the State in the refinery is a financial savings tool whose value will be set by the market," said Dinu Patriciu, chairman of Petromidia's parent company Rompetrol.
The Finance Ministry will send a representative to participate in every Board meeting of Petromidia for as long as the State retains the bonds.
The General Meeting of the company's shareholders is to decide about the release of the bond issue within 40 days as of Tuesday, when the Emergency Ordinance on striking off Petromidia's debts enacted by the Government last Friday was published in the Official Gazette. adrian.mirsanu@zf.ro
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