Thursday, March 17, 2011

Transgaz Asks Romania to Sell More Shares for Investment Plans

Transgaz SA, Romania’s state-owned utility, asked the government to allow the sale of more shares than planned on the stock exchange, to help finance upgrade investments.

The natural-gas grid operator asked for approval for a sale of as much as 14 percent, worth about 110 million euros ($153 million) on top of the 15 percent stake the government already plans to offer on the stock exchange, Elisabeta Ghidiu, a company spokeswoman, said in an interview in Bucharest today. Transgaz hopes to sell at least a 7 percent stake, valued at 60 million euros, which would allow the state to retain a majority in the utility, Ghidiu said.

“We sent the primary-offer proposal to the economy ministry because we need money to fund our investments,” she said. “I don’t expect them to agree with all of it, we want them to approve the idea and then start working on it together.”

Romania plans to sell minority holdings of its utilities and the largest oil company, OMV Petrom SA (SNP), to meet international bailout conditions and cover infrastructure investments. Transgaz is seeking funds to upgrade its outdated gas pipes and for strategic development plans, including connecting its power grid with other countries, Ghidiu said.

Transgaz plans to invest 183 million lei ($61 million) in 2011 for strategic development and 547 million lei in 2012, of which 400 million lei are earmarked for the Nabucco pipeline to bring Caspian gas to Europe, in which the Romanian company is a shareholder, Ghidiu said.
Sale Plans

The Balkan nation plans to select a manager for the sale of stakes in Transgaz and power-grid operator Transelectrica SA (TEL) by August this year and complete the offerings by the end of the year, Victor Cazana, the Economy Ministry official in charge of the sales, told reporters in Bucharest today.

“I know the state wants to sell the 15 percent stake by the end of the year, but it usually takes five or six months to select the sale managers, so I’m not sure that the year end target can be met,” Ghidiu said.

Transgaz rose 2.3 percent to 266 lei as of 2:46 p.m. in Bucharest trading, valuing the utility at 3.1 billion lei.

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 at jagomez@bloomberg.net

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