Friday, October 10, 2008

Romania May Raise EU5 Billion Selling Stake in Energy Holding

By Irina Savu

Oct. 9 (Bloomberg) -- Romania is seeking to raise as much as 5 billion euros ($6.86 billion) by selling a minority stake in a planned state energy holding company.

The government intends to sell a 25 percent interest in Electrica SA two to three years after it's established, the state's asset-sales authority, known as AVAS, said today in a statement on its Web site. The shares will be sold on the Bucharest Stock Exchange.

Prime Minister Calin Tariceanu yesterday authorized the creation of Electrica to hold half the state's energy assets, valued at as much as 24 billion euros, with a view to privatizing them later. The company will include the last three remaining state electricity suppliers, hydropower producer Hidroelectrica SA and coal-fed power plants Turceni and Rovinari, AVAS said.

``The company's operating profit is estimated at 800 million euros by 2012, while its revenue will total around 2.5 billion to 3 billion euros, putting the company in second place in Romania after Petrom,'' according to AVAS.

Romania has sold energy businesses including oil refiner Petrom SA, the country's largest company, and power distributor Electrica Muntenia Sud SA in recent years as the government seeks investment to overhaul the industry.

To contact the reporter on this story: Irina Savu in Bucharest at isavu@bloomberg.net

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