Petrom proposal to increase capital by RON 202 mn

A maximum number of 2.02 bn new shares with a nominal value of RON 0.1 will be issued; subscription period will be between June 28 and July 28, 2010. The state will receive some 416.6 mn of new shares in exchange for some plots of land that will be transferred to Petrom. Shareholders will be also asked to authorise the Petrom's Executive Board to carry out a share capital increase of up to 50% of the existing share capital by issuing new shares in exchange for cash (no bonus shares). The Executive Board authorisation expires once the proceeds from new capital increases reach EUR 600 mn. The amount to be raised is below initial statements that cited as much as EUR 1 bn last December. Still no indications were provided on what the funds will be used for. The EGM will be held in April 29, 2010. We regard the news as neutral.

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