ANAF bans Rompetrol from selling assets, company may take case to international courts

Newsroom 17/09/2010 | 17:03

The dispute between The Rompetrol Group and the Romanian authorities has escalated. The company has recently been informed that the National Fiscal Administration Agency (ANAF) has levied distress on the land and equipment of Rompetrol Rafinare (RRC), which owns the Petromidia refinery, as well as on stakes in company subsidiaries to prevent them from being sold.

The Kazakhs from Rompetrol have to repurchase some EUR 571 million in bonds, a sum that represents the historic debt of the RRC. The company paid up until now EUR 54 million in August, but said at the time it did not have the necessary cash and would convert the bonds into shares instead.

“Through this measure, we plan to protect the national interest. Rompetrol could have converted the bonds into shares but has already made a payment, thus opting for repurchase in full. Therefore it can no longer choose conversion into shares, our legal experts say.

Unless the company pays the rest of the debt, we’ll go for foreclosure. The RRC’s debt represents 2.4 percent of the GDP set to be received by the state budget this year,” said Sorin Blejnar, ANAF president.

The ANAF’s decision comes after a proposal made at the beginning of this month by the RRC board, that the company could mortgage all its assets in favor of its majority shareholder KazMunaiGaz, in order to guarantee USD 900 million in loans. The state will most likely become a minority shareholder in Rompetrol Rafinare this year by converting into shares the bonds that have not been bought back by the company by September 30.

The Rompetrol Group responded immediately. In a press release, the company said, “The ANAF action exercised for an overdue commercial debt and for which the Ministry of Finance will certainly receive shares, as approved by a law passed by the Parliament of Romania, is a measure outside the legal powers conferred on the ANAF. It is unjustified and abusive, contrary to the principles of transparency and good faith, and contrary

to the obligations internationally assumed by the Romanian state to ensure a fair and equitable treatment of foreign investments in Romania.”

Rompetrol has already retained three major law firms on the market, NNDKP, Tuca Zbarcea & Asociatii and Musat & Asociatii, for legal representation in this case. Its lawyers say that, under legal documents, the bonds may be repurchased only in part, so the rest could be swapped for shares.

“In case the series of hostile acts from various state institutions continues, acts coordinated against the RRC, we are considering very seriously, together with our client, the possibility of taking our case to the international arbitration courts,” said Stefan Damian, deputy managing partner at Tuca Zbarcea & Asociatii told BR.

Dana Ciuraru

 

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