Iulian Ernst -
Romanian restitution fund Fondul Proprietatea (FP), managed by US investment firm Franklin Templeton, has criticised the government for blocking the flotation of salt company Salrom.
The fund, which owns 49% of Salrom, repeated on September 15 that it was ready to pay from its pocket the listing cost and planned to contribute part of its shares for any IPO. It said that an IPO would only involve part of the state's 51% stake and would not diminish its control on the company.
According to Fondul, the government's offer to buy FP's 49% stake is not realistic because of legal provisions, which forbid the government from buying stakes in state-controlled companies.
Furthermore, FP argued that the government is bound, under Law No. 247/2005 on property and justice reform, and additional measures, as further amended and completed, to list all state-owned companies in Fondul Proprietatea’s portfolio, including Salrom, by 31 December 2014 – a long overdue deadline.
Government representatives did not attend a general shareholder meeting at Salrom on September 11. One day before, Romania’s Minister of Economy Mihai Tudose invited FP to sell its 49% stake in Salrom to the state. An IPO is not an option, Tudose said. The government plans to resist pressure from FP to hold an IPO of Salrom, given the company's status as Romania's salt monopoly, the minister of economy explained.
“Under no circumstances will we sell or list the company’s shares,” Tudose stressed, speaking to Ziarul Financiar daily. Salrom is a strategic asset that has to remain under state control because there are key sectors of the economy that depend on Salrom, he explained.
This was in contrast to earlier this year, when the company was placed on the government’s list of companies where IPOs are being considered, as part of a broader programme, developed in partnership with the IMF, to streamline the performance of state-controlled companies.
Salrom’s output decreased by 14% y/y to 2mn tonnes in 2014. However, Salrom still reported RON24.5mn (€5.5mn) net profit and a net profit margin of 8.8%. The company’s revenues were RON277.3mn.
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