Friday, July 22, 2011

EBRD May Be Interested in Acquiring Stakes in Romanian Companies

The European Bank for Reconstruction and Development may consider buying stakes in Romanian state- owned companies after the government provides details of its sales program, according to Claudia Pendred, the EBRD’s local director.

The EBRD probably will clarify plans for the possible acquisition of equity stakes in Romanian companies, including in utilitiesTranselectrica SA (TEL) and Transgaz SA, after Prime Minister Emil Boc’s government decides on the size of the stakes it wants to sell and on the sales methods, Pendred said.

“It’s not quite clear what’s going to be privatized, so we have to wait and see,” Pendred said in an interview in Bucharest. “Certainly, if it makes sense, we will do them, but until the plans are cleared, it’s very difficult to comment.” She added that the bank and government will continue to discuss the program.

The International Monetary Fund and the European Union, which gave Romania two bailouts since 2009, have urged the government to sell minority or majority stakes in state-owned companies and improve management to help cut the budget deficit to 3 percent of gross domestic product by next year from 6.5 percent in 2010.

The Balkan country is trying to attract investors to help spark economic growth after a two-year recession. The government plans to sell minority stakes in the utilities, in OMV Petrom SA (SNP), the largest oil company, and in the nuclear power company Nuclearelectrica SA and the hydropower generator Hidroelectrica SA, as well as a majority stake in PVC-maker Oltchim SA.

“Now that the IMF’s second review mission is in town, they will probably decide with the government what’s going to be privatized, how it is going to be privatized, and we can clear our plans afterwards,” Pendred said. “We wouldn’t start buying shares unless there is a reason for it, we would have to feel that we can add value.”

EBRD, which has invested 300 million euros ($425 million) in Romania so far this year, also wants to finance more renewable energy projects and acquire shares in private companies, Pendred said.

To contact the reporter on this story: Andra Timu in Bucharest at atimu@bloomberg.net.

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

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