Romania's Romgaz shareholders reject project for JV with SAPE

The project, approved in principle by the shareholders in January, envisages the establishment of joint stock company with the main business line the supply of natural gas and electricity, Romgaz said in a statement filed with the Bucharest Stock Exchange, BVB, on Wednesday.

SAPE, created in 2014, has as its main activity the management of minority interests which the Romanian state owns in energy companies.

Romgaz director general Adrian Volintiru told local media on Wednesday that the shareholders' decision is not a major issue and that Romgaz could set up its own supply and distribution company, without SAPE.

Shareholders of Romgaz also decided during their extraordinary meeting to approve the procurement of external legal consultancy, assistance and/or representation services regarding a potential litigation on the development of Iernut power plant by the Duro Felguera - Romelectro consortium.

According to documents posted previously on the Romgaz webiste, the company is annoyed with delays in the project.

Romgaz signed in 2016 a 268 million euro ($297 million) contract with DuroFelguera and Romelectro for the construction of a new power plant. In 2017, US-based multinational conglomerate General Electric was awarded an order by the consortium for core technology in the Iernut power plant.

Romgaz's net profit rose 18.9% year-on-year to 1.185 billion lei ($275 million/250 million euro) in the first nine months of 2019.

Romgaz planned investments of 1.245 billion lei, out of which it has used 609 million lei by end-September.

The majority shareholder of Romgaz is the Romanian state with a 70% stake, with the remaining 30% in free float on the Bucharest Stock Exchange, BVB.

Shares in Romgaz traded 0.27% lower at 37.55 lei lei by 1027 CET on Thursday on the BVB.

(1 euro=4.7794 Romanian lei)