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Rompetrol freezes investments in Romania after court rejection of debt settlement
The Rompetrol Group , controlled by Kazakh state group KazMunaiGas (KMG), said it has frozen its investment plans in Romania until the country enacts the memorandum of understanding sealed with the local government on the settlement of the Romanian state's EUR 516mn [ USD 660mn ] claim against the investor, news agency Mediafax reported.
The company has put on ice the EUR 350mn investment plan that include the development of its fuel retail network and the construction of a co-generation power plant on the refinery's platform, Rompetrol vice-president Azamat Zhangulov explained. Rompetrol does not intend to file for insolvency , Zhangulov also said, rebuffing earlier voiced concerns of PM Victor Ponta.
Ponta last week directly accused President Traian Basescu for challenging the settlement agreement reached with KazMunaiGas . Nonetheless, Rompetrol's vice-president also expressed concerns in relation to the new 1.5% tax on special industrial assets to be levied by the government as of January 2014 . Last week, the constitutional court invalidated the law that regulated the dispute. Nonetheless, the settlement can in principle be enacted as a contract between the government and the company. It is actually what the government tried to avoid, President Basescu, who challenged the bill in court, argued. The settlement is not in favour of Romania , he claimed, accusing the government of trying to avoid taking a direct responsibility.
Under the law, drafted by the government and endorsed by parliament earlier this year, Romania has accepted a USD 200mn cash payment plus a bonus of 20% conditioned participation in a USD 150mn investment fund as a settlement for its lasting EUR 516mn [ USD 660mn ] dispute with the company. The USD 200mn is the price paid by KMG for a 26.7pps stake of the 44.7% participation in Rompetrol Rafinare . Romania will thus remain with an 18% participation. (Source:hispanicbusiness.com)
CCR rules unconstitutional law approving memorandum with Rompetrol
The Constitutional Court of Romania (CCR) on last Thursday ruled unconstitutional a law approving a memorandum of understanding between the Romanian Government and the Rompetrol Group NV signed on February 15, 2013 in Bucharest, thus sustaining a constitutionality objection filed by President Traian Basescu.
The judges establish that the law approving the memorandum of understating violates the constitutional principles of clarity and predictability of legislation. CCR argues that that law violates Article 1(5) of the Constitution of Romania that says the observance of the Constitution and the supremacy of it and laws is mandatory.
Judiciary sources told Agerpres that the memorandum of understanding concluded between the Romanian Government and the Rompetrol Group NV remains valid because the CCR was asked to rule only on the constitutionality of the law approving it.
The CCR ruling is final and generally mandatory.