Kazakhs have paid only 10% of Petromidia's debt to the state

Rompetrol Rafinare (RRC) the company that owns the Petromidia refinery now controlled by Kazakh KazMunaiGaz group has paid less than 10% of the 570 million-euro loan falling due at the end of September. The Finance Ministry might get shares in the company to settle the rest of the debt, but the value of these shares is dwindling quarter by quarter because of losses.

The problem with the Rompetrol Rafinare bonds, a deal made by Dinu Patriciu seven years ago, who went on to become a billionaire after selling the entire Rompetrol group to the Kazakhs, could spark the biggest lawsuit in Romania's corporate history; the main issue now is the interpretation of the ordinance whereby Petromidia's long-standing debts were converted into bonds made out to the state. The question is whether the Kazakhs have the right or not to repurchase the bonds only in part. Rompetrol turned to the biggest law firms on the market - }uc` Zb=rcea, Nestor (NNDKP) and Mu[at for legal advice on the matter.

No information had been possible to obtain about the lawyers representing the Romanian state in the case by the time the story was ready for print.

The Government revealed at the beginning of the year it expected to collect the 570 million euros from Rompetrol. Meanwhile, getting the money back has become uncertain and the state cut the salaries of the public sector employees and raised to the VAT to get cash.

Rompetrol Rafinare repurchased bonds worth 54 million euros on August 9, paying with a loan from its majority shareholder, as revealed by the information provided ahead of the General Meeting of Shareholders scheduled for September 14.

The company should pay the remaining 516 million euros plus interest for the past year, worth about 17 million euros by the end of September. The Kazakhs, however, say they do not have the money to pay the debt in full, because of the rising losses of the company year by year. They called the GM at Rompetrol Rafinare to approve the conversion of the rest of the bonds into equity.