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Romania Gets 44.7% Stake In Rompetrol After Company Passes On Cash Redemption

The Romanian authorities Thursday rejoined the shareholder structure of oil refinery Rompetrol Rafinare (RRC.RO) with a 44.69% stake, after the latter failed to redeem in cash a 2.3 billion lei (EUR1=RON4.2674) convertible hybrid held by the government.
Romania Gets 44.7% Stake In Rompetrol After Company Passes On Cash Redemption
Florentina DraguRadu Bostan
30 sept. 2010, 18:27, English

Rompetrol Rafinare decided to convert most of the hybrid into shares instead, the oil company said in a statement.

The company approved a RON1.97 billion capital increase to RON4.41 billion. Rompetrol Rafinare will issue 20.65 billion new shares with a face value of RON0.1118.

Rompetrol Rafinare, owned by Dutch-based Rompetrol Group, was supposed to repay the Romanian authorities a historic debt of EUR570 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.

„The CreditWatch status reflects the uncertainty in terms of any future resolution of the dispute and unforeseen unilateral actions the government might take,” S&P said in a statement.