Romanian authorities have agreed on the deal by which China Energy Company Limited (CEFC) took over 51% of the KazMunayGas International shares (KMGI, former Rompetrol Group), according to a report of Rompetrol Rafinare (RRC) sent to the Bucharest Stock Exchange (BSE).
„CEFC has recently received the approval from the Supreme Defence Council and the confirmation from the Competition Council for completing the takeover of the majority stake in KMG International,” according to the source mentioned.
At the end of all the necessary legal steps, the transaction could be completed this fall but it should be followed by clarifications to the already famous joint investment fund of USD 1 billion through which the Kazakh company would have paid off some old commitments, originated in the privatization of Rompetrol Rafinare.
According to the Rompetrol Memorandum approved by Ponta government, an investment fund should have been established by the Ministry of Energy and KMG but the event has not taken place yet, after four years since the Government approved the memorandum.
After the Chinese company took over the shares, the prospects for the project are completely unclear.
The agreement for taking over KazMunayGas International, signed by KMG and CEFC in December 2016, provides for the Chinese part to „invest in the development of new projects in Romania, the European Union and the countries neighbouring the Silk Road in China and Europe. At the same time, KMG will continue to deliver crude oil to its subsidiary KMGI, to support and expand its core operations in Europe.”
„The completion of the transaction will allow the establishment of a solid basis of cooperation between KMG and CEFC and enable further expansion of KMGI in Eastern and Western Europe but also in other regions of the world. (…) A special attention will be given to projects in Romania, the country where KMGI Group holds the main assets. In conclusion, it should be noted that this global project will have multiplier effects in the economies of the participating countries – Romania, Kazakhstan, China – as well as a positive social impact,” said Zhanat Tussupbekov, CEO of KMG International.
Former Rompetrol Group, the current KazMunayGas International, which controls Rompetrol Rafinare, is present in 11 countries and owns Petromidia Navodari refineries (the largest specialised unit in Romania) and Vega Ploiesti (the oldest active refinery), as well as the fuel distribution networks (Rompetrol) in Romania, Bulgaria, Moldova, Georgia, France and Spain.
The Romanian state holds almost 44.7% of Rompetrol Rafinare (RRC) shares after KMG converted a USD 760 million debt to the state.
China Energy Company Limited (CEFC) is a private business conglomerate active in the fields of energy and finance. CEFC owns two more groups and seven investment companies, a top company listed in China, as well as shares in many international listed companies.
The group has around 30,000 employees in 23 countries across the world and generated operating revenues of EUR 38.9 billion in 2016.
