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March 23, 2023

Minimum price for Petrom stock: RON 0.3708/share

The Government has great expectations about sale. The funds obtained will go to covering the budget deficit, the Economy Minister, Ion Ariton, stated, yesterday.

The Executive set, yesterday, the minimum price for Petrom shares on sale on the stock market at RON 0.3708/share, according the Government representatives, quoted by Realitatea.net. The biggest public offering in the history of the Bucharest Stock Exchange, by which the state intends to sell 9.84 pc of OMV Petrom (SNP) shares, is taking place between July 11 and 22, with the maximum price set at RON 0.46/share. The state can raise a maximum RON 2.56 bln (approx. EUR 610 M). The offering will be deemed a success if investors buy over 80 pc of the shares on sale. In case all stocks are subscribed at the minimum price, of RON 0.3708/share, the state will cash RON 2.066 bln (EUR 484 M), 19 pc below the maximum value it targets. The offering will close successfully and the stocks will be sold only if investors subscribe, jointly, minimum 80 pc of the share package listed.

Out of the 5.75 bln shares which make up the object of the offering, 85 pc will target institutional investors, while the remaining 15 pc will be open to individual investors. The stocks can be subscribed via the brokerage homes BT Securities, EFG Eurobank Securities, Romcapital and CEC Bank.

The minimum price set by the Government for the Petrom stocks’ public offering via the Stock Exchange is the average of Petrom stocks’ trading rate in the past 52 weeks, the Economy Minister, Ion Ariton, stated, yesterday, after the Cabinet meeting.

“We think it is an accurate and feasible starting price. We expect we will be able to cash more than this value per stock at the closing of the transaction,” the minister argued.

In turn, Dan Lazar, state secretary in the Finance Ministry, stated, for Mediafax, that the process of listing 9.84 pc of Petrom shares on the stock market would be resumed next year, should the state fail to sell a minimum 80 pc of the stocks on offer. Asked, subsequently, in a press conference, whether the Government would adjourn the listing of Petrom shares for next year in case the subscription fails to meet the 80 pc- minimum, the Economy Minister, Ion Ariton, argued the possibility existed, in theory, but voiced his conviction there wouldn’t be any need for that, as the state was going to collect a higher amount than the one computed based strictly on the minimum price.

Cabinet relies on last minute subscriptions

The subscription rate for Petrom stocks was low in the first days of the listing, but the Government is relying on the last days of the offering term, after a minimum price was set, and expects the stocks will be sold in full, according to the Economy Minister, Ion Ariton, quoted by Mediafax.

“I am persuaded that the 80 pc-threshold will be surpassed, that we will have a 100 pc subscription and this stocks sale will be a success,” Ion Ariton further stated, in a press conference taking place at the Victoria Palace.

He argued that his optimism comes from two factors which would contribute to the company’s future development, namely, the extension of OMV Petrom’s term of exploitation in the Black Sea basin Neptun perimeter, a concession granted for a 30 years’ term, in which the company Exxon is also associated, and the discovery of natural gas deposits in Totea, Gorj County. “These two elements, as well as Romania’s economic evolution, entitle us to believe that the selling of the share package on the stock market will be a success,” Ariton said.

When asked by the journalists what use the money obtained from the Petrom stocks sale would be put to, the minister stated the funds thus made would go to covering the budget deficit. “The moment the money finds its way in the consolidated budget, the strain on the budget will be reduced and higher amounts will be allotted to investments in the near future,” the minister argued.

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