Monday, October 4, 2010

Romania to Pick Managers for Share Sale in Petrom by End 2010

Oct. 1 (Bloomberg) -- Romania plans to pick managers by the end of this year to broker the sale of a 9.8 percent stake in OMV Petrom SA, the country’s largest oil company, delaying a transaction into 2011, an Economy Ministry official said today.

The selection, which former Economy Minister Adriean Videanu had wanted to complete by September, will push the offering on the Bucharest Stock Exchange into next year as the broker needs “at least a few weeks” to prepare the documents to meet exchange rules.

“We are in the process of selecting managers for the share sale,” deputy Economy Minister Claudiu Stafie said in a phone interview from Bucharest. “We hope to finalize the selection by the end of the year and then the broker will advise us which is the best moment for the sale.”

Romania plans to sell minority stakes in its utilities and of energy producers to raise investment funds and attract foreign capital. The country is relying on a 20 billion-euro ($27 billion) bailout led by the International Monetary Fund after recession and austerity measures reduced budget revenue.

Preparing an already listed company for a new share sale is “the longest” part of the transaction process, Bucharest Stock Exchange Chief Executive Officer Valentin Ionescu said today in a phone interview. “It’s in our interest to speed up the procedure.”

Capital Increase

The government, which owns 20.6 percent of OMV Petrom, wants to use all or part of the cash it gets from the 9.8 percent sale of shares and then spend it to participate in a capital increase in Petrom being arranged by the company’s majority owner OMV AG in Vienna, Videanu said on Aug. 5.

The government is participating in the capital increase so as not to dilute its holdings further and wants to remain a significant shareholder, Videanu said. Videanu left the government on Sept. 3 in a Cabinet shuffle.

Petrom wants to raise as much as 600 million euros ($825 million) by selling shares before the end of April to maintain funds for investments, estimated at 6.9 billion lei ($2.2 billion) this year and at as much as 1.5 billion euros over the next years, the company said on April 30.

OMV’s Chief Executive Officer Wolfgang Ruttenstorfer said on Aug. 4 that the company will wait for the government’s decision on selling part of its stake before considering carrying out a capital increase at Petrom.

Petrom was first listed on the exchange in 2001. OMV bought a 51 percent stake in 2004. Petrom shares fell 0.3 percent to 0.339 lei at 3:19 p.m. in Bucharest, valuing the company at 19.3 billion lei.

--Editors: Douglas Lytle, Zoe Schneeweiss

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

To contact the editor responsible for this story: James M. Gomez in Prague at jagomez@bloomberg.net

No comments: