How does Rompetrol get rid of the USD 660mln debt to the Romanian state: purchasing 26.7% of the shares against USD 200mln and making an investment fund with the state

The Government approved by draft legislation the Memorandum of Understanding concluded between the Romanian state and The Rompetrol Group on February 15^th 2013. Basically, through this decision, the Government agrees that Rompetrol gets rid of the USD 660mln debt to the Romanian state by redeeming 26.7% of the shares at the price of USD 200mln. The agreement also provides the obligation for Rompetrol to finance with USD 150mln an investment fund in which the Romanian state will hold a 20% stake. Any profit distribution will be made only in favor of Rompetrol Group until it recovers 100% of its investment. PM Victor Ponta on Wednesday stated that the main objective of negotiations with Rompetrol wasn’t to obtain a high amount of money, but to unlock a dispute dating back in 2003. As far as the dispute is concerned, the situation was settled 3 months ago, when the lawsuit was suspended at the request of both parties. On February 15^th, the state undertook to ask the suspension of the lawsuit at the following hearing, which was set for February 18t, when the court was to make a decision. The memorandum of understanding was concluded on February 15^th between the Office for State Ownership and Privatization in Industry (OPSPI) and the Rompetrol Group N.V. On behalf of the Romanian state the signatory was the OPSPI head, Gabriel Dumitrascu.