Now, two years after the takeover, the Kazakh company will spend €1.5 billion to capitalize Rompetrol, of which the first tranche, worth €500 mln, has already arrived, and the remainder will follow in the coming few months.

“We sold Rompetrol for 13.5 times EBITDA. This was a world record, and will never happen again. This was the last transaction globally at such a quotation, and it was absolutely fair in such conditions. [Companies] are now sold for 1-1.5 times EBITDA. Some say the deal was over-evaluated. This was the price for KMG to gain access into the European Union and enter a developing market, which the Kazakhs, fully aware of what we were delivering, agreed to pay,” said Sturza, who will leave the Rompetrol management team at the end of this month.
The takeover value of the control package – 75 percent – was $1.6 billion. The price for the remaining 25 percent, recently acquired by KazMunaiGaz, has not been disclosed.

Sturza said that the company’s degree of development back in 2007 required a cash-flow that was difficult to manage through bank sources, as the degree of indebtedness was too high. So they began looking for a buyer.

“It had two lines of attack: one was more pragmatic, closer to the ground, mine; I felt we needed to look for someone in our industry, who has oil and liquidity, ambition to expand, and thus prepared to pay any price. These are either national investment funds in the Arab countries and Asia, or national oil companies. The second was: let’s ‘hook up’ with an American investment fund, a hedge fund, which will bring us liquidity, but will allow us to go on living as we are living, based on the ‘give us the money, we know how to spend it’ principle,” Sturza added.

When Dinu Patriciu decided to sell the company he founded, two negotiation teams were formed: one for the countries in the Soviet influence space and one for Western countries. Sturza coordinated the first team, while the Western companies were approached by Phil Stephensen and Patriciu.

“I was more skeptical about hedge funds and investment banks, which I considered and have proven to be sharks that did what they did,” the businessman said. He negotiated with the Kazakhs personally, based on business relations established over time.

“Until such time as you develop a personal relation of trust, you cannot succeed. Business with the former Soviet space is impossible over the internet and through lawyers,” added Sturza.