1 BILLION EUROS MASS PRIVATIZATION THROUGH THE STOCK EXCHANGE? The government is selling stock of Petrom, Transelectrica, Enel and E.ON

The Romanian government could sell some of its holdings in several companies listed on the stock exchange, such as Petrom and Transelectrica, or in companies which will be listed, which include Romgaz, subsidiaries of Enel and E.ON, and will hold the option to sell the shares in listed energy companies, and expects to make 1 billion Euros in the process. One of the companies listed on the Bucharest Stock Exchange that the state has a stake in is Petrom (SNP), and the government intends to sell 12.64% out of its total stake of 20.64% held by the Ministry of the Economy, with an estimated value of 2.43 billion lei, according to an official document presented by Mediafax shows.

The document says that an investment fund which will be controlled by the Ministry of the Economy will be set up as an alternative source of revenue. The fund will manage the assets of the state in the industry and energy sectors, will participate in the financing of investment projects, and will sell the assets of the state.

Right now, 8.24% of the shares of OMV Petrom are listed on the stock market. Petrom currently has a market value of 19.995 billion lei, at yesterday"s closing price of 0.353 lei/share.

Other companies included on the list are Conpet (in which the Ministry of the Economy owns 58.72% of the stock and wants to sell 7.72% on the stock market for 21.3 million lei), Transelectrica (for which it plans to sell 15% of the total 73.68% it owns for 219.9 million lei) and Transgaz (intention to sell 15%, for 440.2 million lei, out of the 73.51% stake).

21.22% of Conpet (COTE) is listed on the Bucharest Stock Exchange, and the company has a market value of 269,249,120 million lei, at a price of 31.1 lei/share, while Transelectrica (TEL) has a free float of 12.81% and a market value of 1.554 billion lei, at a price of 21.2 lei/share.

Transgaz (TGN) has a free float of 11.5% and a market value of 3.038 billion lei, with a price of 258.1 lei/share.

Another company that the state will sell stock in is Oil Terminal (OIL), where the Ministry of the Economy has a stake of 59.62%. The government"s plan is to sell 8.62% of the company, with an estimated value of 14 million lei.

However, the document states that in the case of Oil Terminal, a legal review of the company"s strategic status is needed, and the state needs to keep the majority holding.

Oil Terminal currently has a free float of 30.38% of the shares of Oil Terminal, and the last price of the stock (0.292 lei) puts the company"s market value at 170,069,633 million lei.

All these stocks will be put up for sale three months after the Government will have approved the operation, and the price in the offer will be set by the intermediary of the IPO and validated by the Ministry of the Economy.

Within 6 to 9 months after the approval of the Government, other minority stakes in companies not listed on the BSE will be put up for sale at auction or on the BSE.

This list includes Romgaz, for which the sale of 15% of the 85.01% stake owned by the Ministry, for 57.4 million lei.

Other 17% stakes, will be put up for sale at auction or by listing them on the BSE: GDF SUEZ Energy Romania and Distrigaz Sud Reţele, E.ON Gaz Romania and E.ON Gaz Distribuţie. The Ministry of the Economy owns 37% in each of these stocks.

The government expects to make 164.8 million lei by selling 17% in each of the three companies (47.8 million lei in GDF SUEZ Energy Romania and Distrigaz Sud Reţele, 42.9 million lei in E.ON Gaz Romania and a little over 74 million lei in E.ON Gaz Distribuţie).

The list of companies that aren"t traded on the BSE, but in which the state plans to sell minority stakes either by floating or the companies or by auctioning the stocks, includes Enel Distribuţie Banat (in which, through Electrica, the Ministry of the Economy holds 24.87%), Enel Distribuţie Dobrogea (24.9%) and Enel Energie (37% of the shares).

In these 3 companies, the Government plans to sell 14.87% of Enel Distribuţie Banat, for 56.8 million lei), 14.90% in Enel Distribuţie Dobrogea for 41.7 million lei and 27% in Enel Energie for 37.8 million lei).

Together with these actions, within a 4 to 6 months period, the Government plans to sell off some of the minority stakes it holds in the privatized energy distribution companies, after exercising the option to sell provided in the contract for the transfer of the right of ownership.

The Ministry of the Economy which owns 27% in E.ON Moldova Furnizare and E.ON Moldova Distribuţie will exercise the option to sell 17% of its holdings in both companies. The government expects the transaction to be completed in about 4 months after the submission of the notification, and it expects to make 30.6 million lei by selling its stake in E.ON Moldova Furnizare, and 110.4 million lei, in the case of E.ON Moldova Distribuţie.

The same operation will be performed for Enel Energie Muntenia and Enel Distribuţie Muntenia (in which the Ministry of the Economy controls 23.57% by way of Electrica).The Government plans to sell within approximately 6 months, 13.57% in each company, for 93.1 million lei for Enel Energie Muntenia, and 683.3 million lei respectively, in Enel Distribuţie Muntenia.

The government expects the combined value of these sales to exceed 4.4 billion lei, (slightly more than 1 billion Euros).

In March the government announced that it would set up a national investment fund whose portfolio would include the minority stakes the state has in various companies and which would be sold to finance various investment projects.