OMV transfers funds for Petrom takeover

On Wednesday, the Austrian oil company OMV transferred almost 1.5 billion euros for a 51% stake in the stock of Romania’s largest company, Petrom.
The privatisation of Petrom, which was carried out through the acquisition of 33.34% in stock and a capital injection through a new stock issue, increased Petrom’s stock market capitalisation by nearly 50% to 4.5 billion euros.
The company will own more than half of the Stock Exchange capitalisation, which following the operation will climb to 8.4 billion euros. On paper, OMV has already gained 800 million euros from Petrom’s privatisation. The 51% stake for which OMV paid 1.5 billion euros is now worth 2.3 billion euros on the market.
Following the capital increase operation, in which the European Bank for Reconstruction and Development (EBRD) and the minority shareholders that subscribed new stock in order to retain the stakes they held also participated, Petrom’s share capital reached 56,000 billion ROL (1.45 billion euros). On the market, the company’s shares which have a face value of 1,000 ROL, have in recent days traded at prices a little over 3,000 ROL.
On Wednesday, OMV transferred into the escrow accounts opened at the Bucharest branch of ING Bank the total amount of 1.499 billion euros. In the transaction, 668.81 million euros accounts for the price of the 33.34% stake in Petrom’s stock directly acquired by OMV from the Romanian state. The remaining amount, 830.5 million euros, will be subscribed in the capital increase. The escrow account was opened with a third party with a neutral role in the transaction. Its main function is to release the deposited amount to the beneficiary only after the fulfilment of certain conditions stipulated in a written agreement. The sum paid by the Austrian company has doubled the value of foreign investments in Romania this year to 3 billion euros, 40% higher than last year.
The amounts will be transferred from the escrow account into the accounts of the Ministry of the Economy (for the stock sold) and Petrom’s account (for the newly subscribed stock) after the stock transfer is booked, the deadline for which is December 20.
EBRD became part of Petrom’s shareholder structure with a stake of 2.026% after the conversion into equity of a loan of 73 million dollars (54 million euros). The shares of the over 600,000 minority shareholders in Petrom amount to 6.2% in the company’s capital. Their total participation shrank from around 7% after they subscribed only two thirds of shares reserved for them in the capital increase operation.
The state still owns 40.74% in Petrom, though this is likely to drop to below 33% in line with clauses in the privatisation contract. The contract stipulates that the state will be allowed to sell to company employees an amount of up to 8% at a price similar to that OMV paid, i.e. 5.25 eurocents/share, currently equivalent to around 2,000 ROL/share. At the time of privatisation, the price per share paid by OMV in euros was equal to 2,160 ROL/share.
vlad.nicolaescu@zf.ro