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OMV to raise €1 billion through share capital increase and convertible bond issuance

OMV, the Austrian-based oil and chemical company, is set to raise around ?1 billion ($1.34 billion) through a share capital increase and convertible bond issuance to fund its acquisition of Petrom, Romania's state-owned petrol company. Up to three million shares will be issued with existing shareholders being granted pre-emptive rights to purchase one new share for every nine OMV shares held. In addition, OMV will issue up to two million bonds to the tune of ?550 million, each bond being convertible into one share of OMV's stock with a maturity of four years and a minimum coupon of 0%.

David Davies, OMV's CFO, comments: ?The combined offering of equity and a convertible bond will allow us to access equity, convertible and debt investors, diversify our funding sources and will help us to maintain our financial flexibility through the commodity cycle. It also strengthens OMV's position for further profitable growth in our core markets.?

The 51% acquisition of Petrom gives OMV an 18% market share of oil products in the 12 countries of the company's core Danube region from southern Germany to Romania. The transaction involves OMV paying ?669 million for the 33.34% stake in Petrom being sold by Romania's privatisation agency which raises its Petrom stake to 51% through an increase in its share capital.

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