KazMunayGaz deal to sell Rompetrol to China’s CEFC falls apart

Sorin Melenciuc 03/07/2018 | 14:32

The deal by Kazakh state energy firm KazMunayGaz to sell a majority stake in Rompetrol, its Romanian business, to Chinese energy group CEFC has fallen apart, according to sources cited by Reuters. The shares of Rompetrol Rafinare, the company operating Romania’s biggest oil refinery, have been suspended at the Bucharest Stock Exchange, after dropping 4.6 percent.

KazMunayGaz agreed in December 2016 to sell CEFC a 51 percent stake in its international business, KMGI, which owns Petromidia (Rompetrol Rafinare), the biggest refinery in Romania, and petrol stations in Romania and other neighbouring countries.

The company said in March that the deal was still on despite the investigation of CEFC’s chairman for suspected economic crimes.

But the deal has fallen apart. “There will be no deal,” a senior Kazakh official told Reuters.

Asked whether any third party had been offered that stake, the official said: “It’s a long process, but there is interest in it.”

Two senior Chinese sources briefed on the status of the deal confirmed that it has fallen apart.

CEFC had been expected to pay about USD 50 million as a deposit to keep the deal alive but the Chinese company could not make that payment before a June deadline, according to Reuters.

A deal by CEFC to buy a stake in the Russian state oil producer Rosneft has also fallen apart earlier this year.

The once high-flying Chinese conglomerate has over the past few months been trying to shed assets in an effort to repay its debt as banks and auditors pore over its financial statements.

In May, CEFC Shanghai International, a subsidiary of CEFC, missed bond payments totaling USD 327.3 million.

Foollowing the news, the Bucharest Stock Exchange has suspended trading in the shares of Rompetrol Rafinare, which lost 4.6 percent of their value on Tuesday.

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