OMV Petrom Drops Capital Increase Plan, On Improved Cash Position

05.11.2011 By Andrei Circhelan

Romanian dominant oil company OMV Petrom (SNP.RO) decided to give up its plan for a EUR600 million share capital increase, as its financial position has improved in the past year, the company said in its quarterly financial report Wednesday.

"Against the backdrop of strong cash generation and a low gearing ratio, we did not request from our shareholders a renewal of the authorization granted at the (meeting) in 2010 to carry out a share capital increase, which expired on April 29, 2011," the company said.

In April 2010, Petrom's shareholders authorized, for one year, the company's Executive Board to carry out a capital increase of up to EUR600 million.

At the end of 2010, Petrom had announced the capital increase might be postponed until after April 2011, since the robust financial situation reduced the need for such an operation.

The company intended to use the funds for investment.

Petrom is 51.01% owned by Austrian oil and gas group OMV, the local Economy Ministry holds a 20.64% stake, investment fund Fondul Proprietatea (FP.RO) holds 20.11%, the European Bank for Reconstruction and Development 2.03%, while 6.21% is free float.

The company posted a net profit of 841 million lei (EUR119 million) in the first quarter, up 4% on the year.

Wednesday in Bucharest, Petrom opened up 0.1% at RON0.416 a share. (EUR1=RON4.0885)