Romania's natural gas company Romgaz (BVB: SNG) invited shareholders on July 1 to approve the issue of FX bonds in the amount of up to EUR 500 million, as well as the contracting of two bank loans for EUR 150 million (from Banca Transilvania) and EUR 100 million (from Unicredit), according to notes sent by the company to investors.

At the same time, the company's management announced its shareholders about the revised financial projections for this year envisaging total revenues of RON 7.6 billion (just over EUR 1.5 billion) compared to RON 8.4 billion estimated initially, and a net profit of only RON 2 billion, some 20% down from RON 2.5 billion projected previously.

The downward revision of revenues and profit was prompted by the lower regulated price for the gas sold to households and district heating producers, RON 120 per MWh (after April 1), compared to RON 150 previously. 

The company has a market capitalisation of RON 21 billion (EUR 4.2 billion) after the price of its shares rose by 33.7% y/y.

The money raised with the FX bonds and bank loans is to be used both for financing current activity and for investments, including the Neptun Deep offshore project – for which the investment requirement is up to EUR 4 billion, of which Romgaz must provide 50%, according to the company's notification sent to shareholders.

The securities will have a maturity between five and twelve years and will be listed on the Luxembourg and Bucharest stock exchanges. 

The issue is part of a larger bond program of the company, up to EUR 1.5 billion.

The intermediation syndicate of the market operation is composed of BT Capital Partners, Citigroup Global Markets Europe, Erste Group Bank, JP Morgan, Raiffeisen Bank International, and UniCredit Bank.

Earlier this year, Fitch Ratings granted the company the credit rating BBB-, in line with Romania's sovereign rating.

iulian@romania-insider.com

(Photo source: Inquam Photos/Adel Al-Haddad)