Romanian government unveils Letter of Intent with IMF in parliament

By bne IntelliNews September 17, 2013

Romanian PM Victor Ponta will inform the parliament on Sep 17 on the Letter of Intent [LoI] sent by his government to the IMF as part of the country's follow-up stand-by arrangement to be sealed this autumn, Ziarul Financiar daily announced.

The government will sell “the majority of portfolio” of companies controlled by the ministry of economy, according to the draft LoI leaked to media. The statement refers to a large number of smaller companies, other than the large key energy companies that have constantly been on the privatisation list and were transferred to the department of energy*. The smaller firms operate in the aircraft, military and mechanical equipment industries.

Privatisation of state companies seems a recurring promise included in each of Romania's stand-by arrangements with the Fund since the first one signed in 2009. The sale of key state-controlled companies or the public offering of minority stakes was, however, constantly delayed, while only a small number of public offerings were carried out indeed.

Currently, the state’s majority and minority stakes in large companies are controlled by the department of energy - petrol products transport company Petrotrans, energy generator Termoelectrica, uranium mining company Compania Nationala a Uraniului, non-ferrous mining company Minvest, mineral water company Apele Minerale, salt company Salrom, copper mining company CupruMin, nuclear company Regia Autonoma Pentru Activitati Nucleare, oil and gas company OMV Petrom, Oil Terminal, pipeline petrol products transporter Conpet, power and gas distribution companies GDF Suez Energy, EON Gaz Distributie, EON Gaz Romania, Enel Distributie, Enel Energie, CEZ.

Among the companies to be privatised as soon as possible are copper company CupruMin, chemical plant Oltchim, mining/power generation groups Complexul Energetic Oltenia and Complexul Energetic Hunedoara and power distribution company Electrica. Separately, the government has to run IPOs or SPOs at key energy companies - hydropower plant Hidroelectrica (10%), gas company Romgaz (10%), gas transport company Transgaz (15%) and nuclear company Nuclearelectrica (10% - currently under way).

* the department of energy operates as an independent entity within the ministry of economy

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