Friday, May 18, 2012

New Romania govt to stick to privatisation plans

By Kylie MacLellan

LONDON, May 17 (Reuters) - Romania's new government will stick to existing timetables for the sale of stakes in state-owned power companies and hopes to achieve dual listings for those slated to go public, its business environment minister said on Thursday.

The left-leaning government sealed parliamentary backing just over a week ago after public anger against spending cuts and tax rises helped it to power in a vote of parliamentary deputies. Romania is due to hold general elections in November.

The new administration will begin with the secondary sale of a 10 percent stake in pipeline operator Transgaz towards the end of June.

Initial public offerings (IPOs) of power producers Romgaz, Hidroelectrica and Nuclearelectrica are planned for September, October and December respectively.

"In terms of the privatisation we will stick with what we committed," Lucian Isar told Reuters during a visit to London.

"I am pushing for a dual listing because I believe it is good for the state and the result of the IPO."

Where they might be dual listed is yet to be decided, he said, but candidates include London and Vienna. Earlier this year the London Stock Exchange signed an agreement with Bucharest to help promote Romanian companies to London-based investors.

Romania, which has long shied away from privatising its inefficient state sector for fear of job losses and accusations of selling off the family silver, committed to an ambitious timetable of privatisations under a 5 billion euro IMF-led aid deal struck last year.

The timetable has slipped again and again and so far it only has a small secondary offering of shares in power grid operator Transelectrica to show.

A failure to sell a minority stake in oil and gas group Petrom - the jewel in an albeit tarnished crown - and copper mine Cupru Min had raised serious questions over commitment even before the previous government fell in April.

Former investment-banker Isar said he was also looking at which other state-owned companies could be privatised to help generate more income for the state and improve Bucharest's international standing in the IPO market.

Bucharest Stock Exchange president Lucian Anghel, also part of the delegation visiting London, said the bourse had this week agreed a tie up with the Bulgarian Stock Exchange which could see its companies list in Romania.

"Our strategy to be a regional hub for smaller countries in Southern and Eastern Europe," he told Reuters.

"After this very ambitious programme we could see even up to a 50 percent increase of daily trading volumes on the Bucharest stock exchange in 6 to 12 months."

Anghel said the exchange had learnt from the failed Petrom sale and taken steps to improve the ease of investing, such as reducing the paperwork and bureaucracy involved, to make it more attractive to international investors.

The Petrom sale is now not likely to be revived until early next year, he said.

Minister Isar said he was looking in to what happened with both Petrom and Cupru Min. The previous government backed out of a deal to sell Cupru Min, the country's biggest copper mine, to Canada's Roman Copper Corp last month after failing to agree to the terms of the deal.

"We will come up with a solution; this could be selling, joint venture, listing. We do not know exactly but in this case (Cupru Min) for sure we will do our homework better," he said. "There are several elements which we didn't agree with and we want to do it properly."

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