Petrotel LukOil Ploiesti refinery takes steps to avoid dissolution

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Russian oil company LukOil decided in an Extraordinary General Meeting of Shareholders at end-2016 to take measures in order to avoid the dissolution of Petrotel LukOil Ploiesti refinery.

Thus, Petrotel-LukOil shareholders agreed that the company not to be dissolved under the provisions of the Company Law, according to the information published in the Official Gazette.

The law stipulates that when a company’s net asset reaches, after some losses, less than half of the subscribed capital, the company’s directors must convene the Extraordinary General Meeting of Shareholders to decide whether to be dissolved.

If the shareholders decide that the company shall not be dissolved, the law provides two options to resolve the situation. Thus, the company is obliged that no later than the end of the financial year, following that in which the losses were recorded, to proceed with the reduction of share capital by an amount at least equal to the losses which could not be covered by reserves. The alternative is that in the same period, the net assets of the company to be reconstituted up to a value at least equal to half of the share capital.

In 2015, Petrotel-LukOil Ploiesti had a net profit of RON 15.1 million compared to losses of RON 308 million in 2014. Moreover, the company has accumulated losses of RON 2.2 billion during 2010-2014.

Last summer, LukOil’s president Vagit Alekperov stated in a interview that the Russian oil company is considering “radical solutions” for its operations in Eastern Europe, including the sale of Petrotel refinery in Ploiesti.

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