OMV, MOL vying for main stake in SNP Petrom

The Romanian State may validate the binding bid placed by Hungarian oil group MOL for a 33.34% stake in SNP (National Oil Company) Petrom, if the privatisation terms are changed, an option that is stipulated in the privatisation announcement.

OMV (Austria), Occidental (USA) and MOL (Hungary) have all placed binding bids for the privatisation of Petrom. The offers are now weighed by the State and by the consultant selected for this transaction. According to OMV officials, quoted by the international press, the authorities will have to disclose the identity of the shortlisted investor by May 6.

“The State is free to change the company’s privatisation terms and conditions, which has been stipulated in the privatisation announcement from the very beginning,” sources close to the privatisation process say.

The Austrian oil group is now deemed the most likely to take over 51% in Petrom. MOL has submitted a financial bid for a 33.34% stake in Petrom, also proposing a stock swap between the two companies.

At first sight, the bid put together by MOL is not in line with the privatisation strategy according to which the investor is invited to directly acquire a 33.34% stake in Petrom and subsequently take part in a capital raise to take its participation up to 51%.

Still, should the Hungarian group’s bid be validated and should the State enter negotiations with OMV, the authorities would have the upper hand in negotiating a price for Petrom, as they would have more than one bidder “in store.”

Although US-based group Occidental was originally believed to be one of the favourites, the statements made recently by the American company’s officials point to a bid that is not in line with the terms and conditions included in the Government announcement.

Bloomberg has quoted an Occidental official as saying that the Americans were not interested in Petrom’s downstream operations, a strategy that clashes with the Romanian State’s expectations.

International financial institutions and the European Union are urging the Government to sell Petrom this summer. Should the current attempt end in failure, the privatisation process would begin all over again, which could cause problems with the international bodies. adrian.mirsanu@zf.ro