IPOs of Romanian energy companies in limbo as new government takes office.

By bne IntelliNews May 8, 2012

The public offerings in key Romanian energy companies will take place as announced but the country's new government that just stepped into office plans to carry them out not only at home but also on foreign markets, the new economy minister, Daniel Chitoiu, said. He was speaking during preliminary discussions with the parliament's expert committee. The dual listing would result in better prices, Chitoiu explained. The head of the ministry's privatisation department, Florin Vladan, however, resigned after Chitoiu's statement, invoking the lack of compatibility with the new cabinet. The former cabinets of PM Boc and PM Ungureanu were preparing quick public offerings at hydropower company Hidroelectrica (10%, new shares), natural gas company Romgaz (15%), natural gas transport company Transgaz (15%) and nuclear power company Nuclearelectrica (10%). Listing the shares of these companies on foreign markets as well is likely to prompt serious delays in the public offering calendar. The 20% public offering of airline company Tarom will be probably delayed as well since the new transport minister, Ovidiu Silaghi, is arguing that it is better to sold the whole company. Tarom should better be entirely privatised, while only a part of the freight railway company CFR Marfa should be sold, minister Silaghi was quoted as saying by news agency Agerpres. As we have reported, the past governments agreed with the IMF to sell 20% in Tarom via IPO this month and fully privatise CFR Marfa by the end of October. There has been no public statement yet on the planned sale of 100% of two Romanian mining/power generation companies - Oltenia and Hunedoara, recently set up by the merger of smaller state-owned entities. Their sale, however, is unlikely to take place this year since the deals would have a major impact on the energy industry and the new government already voiced plans to revise the strategy in the sector.

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