Oil Refinery Brod falls into debts

Accumulated losses of Brod Oil Refinery is greater than 260 million, while long-term liabilities amounted to 310 million, which is three times more than the company’s assets, it was concluded in the audit report for Refinery in 2014.

Rafinerija Brod

Auditing company Deloitte expressed the doubts about the transfer prices with related parties, to which the refinery owes almost 300 million euros. “The Company has significant transactions with related parties (Optima Group, Zarubezhneft, Neftegazinkor, Oil Refinery Brod and Nestro Petrol Banja Luka). Although management of the Company believes that they have a favorable and adequate documentation related to transfer pricing, there is still one uncertainty; requirements and interpretations of IRS and other bodies differ from the managements interpretations”. Analysts point out that it is only a question of time before refinery shuts down, because over the years it draws big money.

Oil refinery Brod reported a net loss of 13 million euros in the last year, while its short-term liabilities exceed working assets by nearly 20 million, so the reviser found that the survival of the company is uncertain. Refinery ability to continue, depends solely on the continuous support of the matrix company, Neftegazinkor Russia.

It should be noted that the refinery has a debt to the IRS in the amount of 53 million for interest-free rescheduling of tax liabilities, and owes 1.7 million to the Government of RS, as the Government paid the municipality of Brod for use of urban construction sites.

Sinisa Vukelic, editor of the “Capital.ba”, says that everything is suspicious about refinery’s operation, and notes that public still does not have access to the contract and annexes to contracts on the sale and privatization of the oil industry, and that has never been clarified who are the owners of the matrix company, Neftegazinkor. “We know that Russian company “Zarubezhneft” holds 40% Neftegazinkor, however, the majority owners (60%) are three legal entities. Many say that one of them was established only a month before the purchase of oil refinery in Brod”, Vukelic said.

To remind, in 2008 the Russian company Neftegazinkor, founded “Optima group”, which controls input and output of crude oil from refineries. While refinery in Brod has accumulated losses of 260 million euros, Optima Group has more than 600 million annual turnover, making it one of the top three companies in Bosnia and Herzegovina in 2013, and is also on the list of 500 largest companies in Central Europe.


Source: Biznis.ba

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