The National Oil Company-Petrom is preparing to launch on foreign capital markets a bond issue without government guarantees, whose value ranges between 150-300 million dollars.
According to SNP Petrom estimates, the bonds will be issued no sooner than the end of May, as soon as a consulting firm finalises the report regarding the company rating.
In case the bond issue is a success, Petrom will become the first company in Romania to borrow money from the foreign market without guarantees granted by the Government.
“So far, we have received five offers from investment banks that are interested in managing the bond issue,” Ioan Popa, Petrom general manager, told Ziarul Financiar.
Market sources say that the race for Petrom was entered by Banca Comerciala Romana (Romanian Commercial Bank – BCR) together with JP Morgan Chase, ING Barings and ABN Amro Rotschild.
According to Popa, the offers submitted by banks will be analysed these days and the winner will be announced by next week.
“We plan to obtain an interest rate level close to international levels. Petrom has no debts whatsoever and I believe this issue will matter a great deal to investors from foreign capital markets,” Popa added.
The sums derived from the respective loan will be used by the national oil company for finalising investments envisioned to reach 300 million dollars this year.
“We shall use the respective amounts both for crude imports and for exploring and exploiting oil fields that we own abroad,” Petrom general manager explained.
Petrom management last year achieved profit standing at approximately 1,600 billion lei, against turnover of 56,034 billion lei. For 2001, the company’s profit is estimated at 1,800 billion lei, against turnover of 65,014 billion lei. Revenues derived from exploiting are expected to amount to about 115,000 billion lei.
Foreign analysts think that Petrom could obtain an interest rate ranging between 11.5-12% per year.
“The Romanian company comes after a privatisation failure and this could matter to investors,” Moritz Schularick, Deutsche Bank analyst for emerging markets, told Ziarul Financiar.
Deutsche mark-denominated bonds issued by the Finance Ministry in 1997 yesterday were traded for DM99.2, against the nominal value of 100 Deutsche marks. The bonds’ interest rate amounts to 7.7 percent, therefore they are traded for an almost 9% interest rate.
As compared to last year, the price of Romanian bonds has posted an increase, which triggered a drop in their yield (effective interest rate).