Andrei Cionca, ROCA Investments: "Romania's economy has a capital problem"

The economy of our country does not have a problem of resilience but a problem of capital, so it is necessary to create instruments that facilitate the entry of capital into Romanian entrepreneurial companies, said yesterday Andrei Cionca, co-founder of ROCA Investments, on the occasion of the event that marked the transfer of ROCA Industry shares from the AeRO Market in the Main Market of the Bucharest Stock Exchange (BVB).

Andrei Cionca said: "From my point of view, the economy knows what it has to do. Romanian entrepreneurs have the ability to overcome difficulties. Romania's economy does not have a problem of resilience, but a problem of capital and very accelerated development. From my point of view, we need to create some easy tools through which we can bring capital into Romanian entrepreneurial companies and of course give them certain facilities. We offer facilities to foreigners, but we must also create facilities for Romanian players who are growing up. I think it's a matter of size. As Romanian companies become bigger and stronger, they will learn and acquire the negotiation capacity that foreign players have. We are at the beginning and it is time to learn, to import what others do well and to bring very quickly to the Romanian market tools that work elsewhere".

According to the co-founder of ROCA Investments, the real industrial potential of our country lies in second-tier cities. "Roca Industry brings capital to some companies that are under the radar of a certain type of investor. They are companies in an accelerated growth stage. I think that the real industrial potential of Romania is not in Bucharest, it is in Romania's second-tier cities, for example Reghin, Hârşova, Râmnicu Vâlcea, Piatra Neamţ, Bistriţa. These are the cities where Roca Industry has brought capital, invested in companies that it aims to help become regional champions," said the co-founder of ROCA Investments.

Andrei Cionca added: "ROCA Industry does not buy minority stakes in companies, but buys packages that ensure its control, sometimes using debt. We looked to see if this product works in much more developed markets outside. I have studied longer series of 20 years and have seen this product work. In somewhat more developed markets, the promise of this product is a yield greater than 20% per year. These yields are delivered in conditions where companies are bought at EBITDA multiples much higher than what ROCA Industry is buying today in Romania. Outsiders also use a lot of debt. I was surprised to see that in recent years the leverage used is sometimes over 70% of the purchase value. We do not use this level of indebtedness (...). I expect that the promise of the portfolio (n.r. ROCA Industry) will be similar to what we see outside, that is double-digit annual returns and which I hope will start with two".

ROCA Industry is the building materials holding company of ROCA Investments.