Thursday, January 23, 2014

Romania Plans to Stick to IMF-Agreed State Asset Sale Schedule

Bloomberg News

By Andra Timu
January 22, 2014

Romania will stick to deadlines agreed with the International Monetary Fund to sell state-owned stakes in utilities if conditions allow for successful sales, the head of the Energy Department’s asset-sale program said.

The Bucharest-based government is seeking to ready the sale of a majority stake in power generator Electrica SA by the end of June and a minority stake in hydro-power generator Hidroelectrica SA by July, Gabriel Dumitrascu told reporters in Bucharest today.

“We don’t intend to re-negotiate the agreed calendar for the sales because we want to meet our pledges,” Dumitrascu said. “The exact moment for starting the offers, though, will depend on the market conditions at that time and on what the sale managers advise us because we want to get the best results possible.”

The second-poorest European Union member has been selling minority stakes in state-owned companies to cover its budget deficit and ease the state’s influence on the economy. The plan is part of the government’s pledges to the IMF and the EU under a third consecutive bailout agreement.

A joint mission of the IMF and the EU, along with the World Bank, is reviewing Romania’s progress under the bailout accord. The deal remains frozen for now because President Traian Basescu refused to signed documents needed to complete a previous review because of a dispute with the government over a fuel tax. The mission will end on Feb. 5.
Selling Assets

Romania raised 1.7 billion lei ($509 million) by selling a minority in natural-gas producer Romgaz SA in November, the eastern European country’s biggest initial public offering. It also sold a minority stake in nuclear-power generator Nuclearelectrica SA and 15 percent stakes in Transgaz SA and Transelectrica SA as part of the 4 billion-euro ($5.4 billion) agreement with its international lenders.

The government is also planning to sell a minority in state-owned Complexul Energetic Oltenia SA, after “making the company more viable” by transferring two of its mines, Alunu and Berbesti, to a new company, according to Dumitrascu.

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

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net

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