Around 60,000 people, who have been Petrom employees since August 2003 until now, could share an over €500 million profit from an 8% stake in Petrom they will receive from the state.
The 8% of Petrom will be directly distributed to the company's employees at a price equal to 0.0525 euros/share, the price received by the state from the Austrian OMV group at the time it took over Petrom. The employees of Petrom will pay €235 million ($319 million) for a stake that is worth, at present, around €750 million ($1,019 billion) on the Bucharest Stock Exchange, standing to gain €515 million from the deal. Primarily, the profit stems from the upward trend experienced by Petrom's shares on the Stock Exchange since privatization in the summer of 2004.
Petrom's shares have increased by around 2.2 times since privatization, from around 0.25 RON/share to 0.55 RON/share, the latest price on the market. This profit could be equally divided among approximately 60,000 employees the company has had since 2003. In theory, each employee should derive a profit of approximately €8,500, on condition that the share price should remain the same. However, in reality when the 8% in Petrom is transferred to the employees, it could put pressure on the price of the company's shares on the Stock Exchange, causing it to drop, which could cut back some of the profit.
According to the Government Decision draft published on the website of the State Assets Resolution Authority (AVAS), the shares in the 8% stake in Petrom are to be equally distributed to all those entitled, that is to all the people who have been Petrom employees since August 2003 until now. The stake put up for sale consists of 4.48 million shares, with each employee set to receive 75,000 shares this way. Still, in case the draft is enacted as it is, Petrom's employees will have to wait a few months before they can actually buy the shares. During this period, AVAS will select a privatisation broker to handle the sale of the shares and will conduct information campaigns in the media. AVAS will also sign a protocol with the Ministry of Administration and Interior (the current Ministry of Interior and Administrative Reform) to get personal data necessary to identify the people entitled to buy shares, according to the normative act.
According to the draft, Petrom's employees will have 60 days from the date announced by the privatisation broker to submit the necessary documents to buy shares. The draft, however, does not state whether the contract to sell the shares to employees will contain restrictions as to the manner in which they will be allowed to sell shares on the Bucharest Stock Exchange. "The absence of such provisions from the sale contract could lead to a decline in the value of Petrom shares on the stock exchange, which would put the other shareholders at a disadvantage. Even so, there is a substantial amount of foreign funds and even Romanian money to absorb these shares. In any case, there will be a recoil," says Octavian Molnar, deputy chief executive of Arad-based IFB Finwest brokerage firm. (zf.ro)