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EBRD lends to Romanian oil company Petrom
$150 million loan includes significant support from western commercial banks
A $150 million pre-privatisation corporate loan arranged by the European Bank for Reconstruction and Development has received significant support from western commercial banks. The loan provides critical support to Petrom's restructuring ahead of privatisation.
The EBRD is providing $100 million and five co-lending commercial banks $40 million. These co-lending banks are: Bank Austria (Austria), Citigroup (USA), Credit Agricole Indosuez (France), Natexis Banques Populaires (France), Caja Madrid (Spain). The Black Sea Trade and Development Bank is providing a further $10 million in a parallel loan. The EBRD has acted for the syndication of the full amount of the loan, which is made directly to the company without a sovereign guarantee. This is the largest long-term syndicated loan to a state-owned company in Romania, SNP Petrom respectively, its privatisation meaning a significant step towards the modernisation of the Romanian energy sector.
Noreen Doyle, the EBRD First Vice President, speaking in Bucharest today, said the loan reflects a growing sense of confidence amongst investors towards Romania. She said this support is an incentive for the country to continue with reforms and strengthen the investment climate. She welcomed the government's commitment to Petrom's restructuring and privatisation programme and said it was clear illustration of the commitment to reform.
Dan Ioan Popescu, Minister of Industry and Resources, said he appreciated the collaboration with the EBRD, as well as the participation of some important western commercial banks in providing the loan. He expressed confidence that these funds will strengthen the Romanian oil and gas industry sector. The Minister said the loan was without a sovereign guarantee, a recognition of the achievements Romania has made during the last years in the process of industrial restructuring and modernisation, particularly in the oil and gas sector.
The total loan will help finance a 3-year modernisation programme at Petrom's refineries, with a particular focus towards improving the company's environmental practices in order to meet European Union standards. Modernisation will include projects associated with the Fluid Catalytic Cracking (FCC) unit, modernisation of the refinery process control systems and incineration of toxic waste from the acrylonitrile unit.
Ion Popa, Petrom Executive General Director, highlighted the importance of the restructuring and development programmes of SNP Petrom and thanked the banks for supporting these programmes, which contribute to the consolidation of Petrom's position on hydrocarbons market. At the same time, he mentioned that the loan represent also a real support for SNP Petrom in the privatisation process.
The EBRD is pleased to support the restructuring and privatisation of state-owned companies. Ms Doyle said that Petrom would be an important benchmark in the modernisation of the country's energy sector, where the Bank aims to help make oil and gas companies more competitive and compliant with the quality and environmental standards expected by the EU prior to accession.
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