SNP (National Oil Company) Petrom, the largest company on the Romanian market, may be privatised through the direct sale of a 30-40% stake in the company, with the strategic investor to hold at least 51% in Petrom, after contributing to a capital increase first.
This solution seems to be to the liking of Romanian authorities, according to Gheorghe Constantinescu, the company's general manager.
"After the consultant submitted the report, we logged some observations, with these issues to be clarified as soon as possible. The best solution is an investment in Petrom, as this would secure the long-term growth of our company. A 30-40% stake could be sold directly to the strategic investor, who would then come to hold the main stake by a contribution in cash to the company's capital," Gheorghe Constantinescu, SNP Petrom general manager told Ziarul Financiar.
Technically speaking, a capital increase needs a contribution in cash from all the shareholders, including the small stockholders who bought shares on the Stock Exchange. Small shareholders such as SIF (Financial Investment Company) Oltenia, US investment fund Broadhurst Inv., Iulius Baer or the Federation of Free Independent Petrom Unions hold some 1-1.5% in the company each. In the event of a capital increase, they may choose to participate or stay out of it, in which case their stakes will go down.
The SNP transaction is worth several hundred million dollars or even over one billion dollars, depending on the concrete privatisation conditions. As a comparison, the Hungarian Government yesterday said it would sell its 23% stake in oil group MOL on the stock exchange. The operation is assessed at 667-890 million dollars, as MOL posted some $4.4bn turnover last year.
Petrom's privatisation strategy is still at the Industry and Resources Ministry, which owns 93% in the company's shares. The ministry will present the company's situation to the government next week. The exact details will be known after the Government endorses the privatisation strategy and the privatisation ad is published (scheduled before June 30). The privatisation contract must be signed on December 31, 2003, according to the schedule approved by the Romanian authorities and the international institutions.
"We shall submit the privatisation solutions to the Government by next Tuesday at the latest. Petrom's privatisation is on track," Industry and Resources minister Dan Ioan Popescu said. The minister has repeatedly said that Petrom will be privatised, not sold, as Romania is rather interested in consolidating Petrom into a powerful regional leader, not in the amount of money it can get for the company.
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