Rompetrol Rafinare stock price soars on debt rescheduling, split rumours

In only one week, Dinu Patriciu added tens of millions of dollars to his fortune, not in cash, but due to the soaring market capitalisation of one of the companies where he is, indirectly, the majority shareholder – Rompetrol Rafinare – Petromidia.

The shares of Rompetrol Rafinare, listed on the Rasdaq market, have climbed 50% in the past week, after the Finance Ministry endorsed the rescheduling of the company’s overdue debts and penalties, worth $603 million.

Thus, the market value of the company (whose main assets are the two refineries – Petromidia and Vega) went up from $95 million to $140 million. The stock price surged from 44,000 ROL two weeks ago to 66,000 yesterday.

Rompetrol Grup BV (controlled by businessman Dinu Patriciu and Austrian group OMV) owns the main stake in the company – 70.89%.

The $603m debts will be rescheduled under a bond issue maturing in 20 years, at most, to be entirely underwritten by the Romanian State.

“I am not aware whether the bond issue alone contributed to the stock surge. The face value of Rompetrol Rafinare shares is 214,200 ROL and I for one believe this is their real price. The gap between the face value and the current price will gradually disappear,” Dinu Patriciu told Ziarul Financiar.

According to the Romanian businessman, the soaring stock price could also be grounded on the H1 financial results posted by Rompetrol Rafinare, if they are compared to the performances of its competitors.

“The price of Rompetrol Rafinare shares now accounts for 20-30% of their face value. On the other hand, Petrom shares are being traded at about 140% of their nominal value. I do not believe that the H1 financial results could justify such a wide gap,” Patriciu stated.

In the first six months of 2003, Rompetrol Rafinare cut losses to 9m euros, down from the 55m euros logged as losses in the year-ago period, whereas turnover went up 22%, to 440m euros.

Last year, Rompetrol Rafinare came to include the main assets of Vega refinery, also held by Rompetrol group. Vega (now Rompetrol SA) participated with its assets in a capital increase and became a shareholder of Rompetrol Rafinare (with a 14.44% stake).

However, brokers have a different explanation for the price surge.

“Rescheduling the company’s debts under a bond issue is one cause, but the main factor was the rumour on a future stock split, to a face value of 1,000 ROL. Should this stock split occur, shareholders of Rompetrol Rafinare stand to gain a great deal,” says Rares Nilas, general manager of BT Securities, the brokerage of Banca Transilvania. laurentiu.ispir@zf.ro