The OMV Group is preparing to buy Petrom (the Romanian National Society of Oil)

While the negotiations with the Romanian authorities for buying Petrom are going further, OMV is looking for that kind of financing which won’t weaken their state in the Romanian market.

The value of this contract, which was supposed to be signed next week, is approximately one billion US dollars. The analysts are investigating the way in which the Austrian Group OMV is going to pay this sum. OMV is to get 51% of the Petrom stocks by buying other stocks later, because, for the moment, the Romanian state is selling only 33.34% of the stocks. This transaction means more problems than only that of the financing.

The MOL state

In the year 2000 OMV bought 9% of the stocks of their Hungarian competitor MOL. "At that time the prices of the stocks were low and we wanted to eliminate the strategic investors in the area", aid Wolfgang Ruttenstorfer, the executive director of OMV. In the meantime, the price of the MOL stocks has risen from 5000 to 8000 forint, but the Austrian group still doesn’t want to sell them in order to obtain the sum they need to buy the Petrom stocks. In the present the MOL stocks that OMV owns are valued at about 350 million US dollars. The OMV official says that the OMV stocks bought from MOL has a great importance for the Austrian strategy in the Central and Eastern Europe. Two months ago in Bucharest Ruttenstorf was stating that "in the year 2008, OMV is to double their share to 20% in the Danube region".

Smokescreens

Only Ruttenstorf can say whether he said they won’t sell the MOL stocks because he was afraid of the speculations which would have lowered their price, or because by keeping the MOL stocks it will be easier to expand their influence. This is a backup in case that the Petrom negotiations won’t go through. MOL proposed a partnership with Petrom which involves a mutual exchange of stocks.

On the other hand, the OMV leader believes that the Romanian Government should set the date of the contract signing. "Who knows what’s going to happen in the following years? All the options remain open", he then said.

Credits and assets

Also in Bucharest, the OMV director states that the group has the capacity to buy Petrom. Now the details concerning the indebtedness degree, in the case this would depend only on the banking credits, come out in front. "The ratio between the net debt and the capital decreased to 35%, but we are not concerned about an increase up to 50%, in the regional expansion phase until the year 2008", says Ruttenstorf. He also states that the Petrom buying won’t determine the ratio increase to 50%.

Sale

The Romanian Government is selling 33.34% of the 93% capital it owns at Petrom. The privatization project includes a capital increase with which the foreign investor will own new stocks with a final result consisting in 51% of the stocks of the Romanian oil society. Ending the National Society of Oil PETROM is one of the terms of the agreement between the Romanian Government and IMF (the International Monetary Fund) and the EU.