Petromidia's long overdue debts unpayable

Petromidia Refinery, controlled by private oil group Rompetrol, will never be able to pay its long overdue debts to the state budget, because its indebtedness has reached the maximum level for a company in Romania, Rompetrol chairman Dinu Patriciu said. “Petromidia will never be able to pay these debts (i.e. the historical debts). A simple calculation shows it could probably pay them in ten years. The point is it would be paying passive debts, instead of active debts, such as those related to retooling, for instance. For a company in Romania, we can simply not go any deeper into debt,” Patriciu explained. He added he had sent a memo to the proper authorities explaining the debt situation at Petromidia. The refinery’s historical debts amount to $417 million, while its turnover is worth about $915 million, therefore indebtedness reaches 46%. Out of the total $417 million, approximately $344 million account for actual debts, with the rest made up of late charges and penalties. “If they discard our memorandum, GDP will fall 2.4% and thousands of people will find themselves jobless. I don’t think this will happen, though,” Patriciu said. Petromidia paid $190 million to the State in 2002 and will be able to come up with another $250-$300 million this year, as the Rompetrol head estimates. ZF