3bn-euro profit on paper for Petrom''s owner

Austrian petroleum group OMV is making a 3 billion-euro profit on paper from the takeover of the biggest Romanian company, Petrom, less than two years ago. The Austrians will collect their first profit right this year, if the General Meeting of Shareholders approves dividend disbursement today.

OMV is supposed to collect more than 100 million euros if the proposal of the company”s management on dividends gets through.

The majority stake owned by the Austrians is worth some 4.3 billion euros at the moment, while they paid 1.5 billion euros for it.

During the General Meeting of Shareholders that takes place today, the Petrom shareholders are to discuss approving the distribution of dividends worth 212 million euros (738.4 million RON), half of which, 106 million euros, should go to the majority shareholder, OMV. The dividend per share proposed by the management stands at 0.013 RON.

Petrom granted dividends only in one of the last three years, but even then the dividend value was five times lower than distributed this year.

The managers resorted to an accounting trick last year in order to be able to grant dividends, covering the losses made in the previous years, 800 million euros, using the issue premiums for the share issue related to the privatisation of the company and the reassessment reserves. The losses a company makes are usually covered from the profits in the following financial years.

The Austrian group has collected 234 million euros from Petrom since taking it over, in a deal whereby Petrom acquired OMV”s operations in the region.

Petrom bought OMV”s filling stations in Romania, Bulgaria, Serbia and Montenegro early this year, which adds 178 stations to the approximately 600 self-branded Petrom stations in Romania.

Petrom bought from OMV 99.9% in the following subsidiaries of the Austrian group: OMV Mineraloel Romania, OMV Bulgaria EOOD and OMV Yugoslavia, thus taking over 73 petrol stations in Romania, 74 in Bulgaria and 31 in the former Yugoslavia.

The Austrians agreed in the summer of 2004 to pay some 1.5 billion euros for the controlling interests in Petrom. 669 million euros of this money were paid to the state for a 33.34% stake in the company, while 830 million euros were the necessary capital contribution to attain 51%. The Austrians also had to contribute another 9 million euros this year to maintain their position of majority shareholder during a capital increase performed by inclusion of a number of plots of land held by the state into the capital of the company.

Petrom has about one billion euros in cash at the moment, part of which are placed in investment funds, and the rest in banks. Most of the money comes from the capital increase that the Austrians conducted when they took over the company. In addition, Petrom collected some 100 million dollars (80 million euros) at the end of last year from the sale of the offshore rigs to the Grup Servicii Petroliere company. vlad.nicolaescu@zf.ro