The Rompetrol Group NV (TRG) received today from the Romanian Privatization Agency (AVAS) the final compliance certificate concerning the 2001 privatization of Petromidia refinery, located on the Black Sea coast. The document acknowledges that TRG completely fulfilled all its obligations under the terms of the privatization contract.
In February 2001, TRG took over the Midia Navodari Petrochemicals plant (Petromidia) from the State Ownership Fund (SOF), and subsequently changed its name into Rompetrol Rafinare. The Group undertook a series of obligations and commitments, including investments of $225 million in environmental and technological upgrades and capital share increases, scheduled over a five-year period.
At that time Petromidia was an undercapitalized company, posting in 2000 a turnover of just $286 million and processing less than 1 million tons of crude per year. Since then, the refinery continued to improve its performance and its turnover soared to $2.15 billion in 2005, with an operational profit (EBITDA) of $157.8 million, reaching the best results since the refinery was established more than 30 years ago.
The positive operational results have been maintained to date when refining capacity is up to almost 4 million tons of crude per year, and the goal set for the following two years is to reach 5 million tons. Aside from modernization and bringing refining operations to profit, TRG also invested in restarting the petrochemicals plant, whose operations were almost abandoned prior to privatization. All these are the result of a $300 million investment program implemented in the last five years.
TRG has a proven track record in turning around several assets acquired from undercapitalized and almost bankrupt companies, and transforming them into world-class businesses. All these restructuring processes have been conducted without generating social upheaval, a unique achievement in the context of Romanian transition to a market economy.
The Group’s turnover also registered record gains throughout these years. Now TRG is active in 13 countries, expects a turnover exceeding $6 billion in 2006, and estimates gross revenues of $7.5 billion for this year.
“The document issued today by AVAS proves that any accusations about the way the Petromidia privatisation had been conducted are wrong, biased, and politically influenced. The success of transforming this company is not measured only by the cold numbers of financial results, but also by the well-being of the local community and the respect we’ve gained among our business partners”, says Dinu Patriciu, TRG Chairman.
During these past five years, AVAS repeatedly certified TRG’s timely fulfillment of annual contractual obligations, irrespective of the political structure of the ruling government. Because of the complexity of these assessments, the document officially issued today comes a year after the final fulfillment of contractual obligations, just as was the case with earlier annual compliance certificates issued by AVAS.