Monday, November 19, 2007

Romania to sell drugmaker through open bidding

BUCHAREST, Nov 19 (Reuters) - Romania's centrist government approved a plan on Monday to sell the country's last-remaining state-owned drug maker Antibiotice Iasi (ATBE.BX: Quote, Profile, Research) through open bidding.

The government had previously planned to sell its 53 percent stake in the firm to a strategic investor through a process that involved binding bids and was based on negotiations with short-listed bidders.

"Privatisation agency AVAS will launch the sale process of these shares, based on a new strategy that aims to reduce the risks of granting potential state aid to the company," the government said in a statement.

It added the new strategy also aims to speed up the privatisation process.

The workers' union of Antibiotice has criticised the new plan, saying it was too speedy and threatened to damage the company's image since the open-bidding sale procedure has been used in the past to privatise loss-making firms.

European Union newcomer Romania received 22 non-binding letters of interest last year for Antibiotice, which has ambitious growth plans, including the addition of 40 new products to its portfolio in five years.

The company posted a 22 percent annual rise in net profit to 23.2 million lei ($9.7 million) in the first nine months, and a 15 percent increase in turnover to 150.4 million lei.

AVAS had initially planned to launch the sale in October, but later signalled delays saying it would call for bids in the fourth quarter.

Earlier this year, AVAS used the process of binding bids and negotiations to sell a majority stake in carmaker Automobile Craiova to U.S. giant Ford Motor Co (F.N: Quote, Profile, Research). The deal is pending a European Commission probe into possible state aid granted in the sale.

(Reporting by Luiza Ilie; Editing by Elizabeth Fullerton)

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