AVAS holdings on sale on the Stock Exchange following foreclosure

• According to some sources, DAC Air, owned by the Păunescu brothers, is foreclosing on the AVAS

The minority stakes that AVAS owns in "Mercur" Craiova (MRDO) and "Agrana România" (BETA) were yesterday auctioned off on the Bucharest Stock Exchange, through a special sale, intermediated by the brokers of "Oltenia Grup Invest", on behalf of the executors "Dobra, Coşoreanu & Dobra".

Contacted by BURSA, the representatives of the court appointed executors said that the sale of the stakes of AVAS is occurring because the institution is being foreclosed upon.

"These special sales are connected to a foreclosure case of AVAS. However, the information is confidential, I can not tell you what is happening in the file, but you can find it on the portal of the Romanian courts. What I can tell you is that we have resorted to this method of sale because it is required by law", said Aurelian Tudorache, advisor at "Dobra, Coşoreanu & Dobra".

"It is an optimal time for foreclosing on the AVAS, because in August the courts go on holiday and even if the Authority were to dispute the foreclosure, it would take a while for it to get its money back. Most likely, by the time the judges return from holiday and the state gets an answer, the two stakes will have long been sold, and the money will have been received", said sources from the market, who did not wish for their names to be disclosed.

Through the AVAS, the Romanian state holds 5.85 million shares in "Agrana România", (4.05%), and 31,773 shares in "Mercur" Craiova, (2.68%).

Sources close to the AVAS confirmed yesterday that the Authority is being foreclosed upon. The same sources said that it is DAC Air, a company owned by the Păunescu brothers, that is foreclosing on the Authority.

The two blocks of shares that were put up for sale yesterday, did not find any buyers, according to Mr. Adrian Săndiţă, the general manager of "Oltenia Grup Invest".

"I can"t tell you how long the special sale order will remain in the market, it is a decision which lies with our client, namely the court appointed executors of "Dobra, Coşoreanu & Dobra", said the head of "Oltenia Grup Invest".

Yesterday, the order to sell the shares that AVAS owns in "Agrana România" was placed at 0.48 lei/share. For reference, the shares of BETA were last traded on the BSE at 0.4 lei, on Jul 25th, with no other trades taking place since then.

The price requested by the executors for the stake that the state has in "Mercur" Craiova was 27 lei/share, slightly below the price of 28 lei that the shares of MRDO were traded at yesterday on the XMBS segment of the Rasdaq.

Contacted by BURSA, the members of the management of "Mercur" and "Agrana" declined to comment on the situation, claiming that they were not aware of what was happening on the Stock Exchange, whereas others said that the entire situation was the business of the AVAS and that they would abstain from commenting on the issue.

"Agrana Zucker" GmbH Viena owns 91.12% of "Agrana România". The company, which specializes in the production and distribution of sugar, last year had a turnover of 631.5 million lei and a loss of 19.3 million lei, according to information from the website of the Bucharest Stock Exchange.

"Mercur" Craiova is controlled by SIF "Oltenia", which owns 85.5%. Last year, the company had a turnover of 12.7 million lei and a net profit of 3.29 million lei.

Until now, the Authority for the Recovery of State Assets was constantly having its account attached by the former investors in the National Investment Fund (FNI), to whom it had been sentenced to pay damages. On June 22nd, Traian Băsescu passed a law which institutes protection measures for the AVAS against the victims of the FNI, stipulating that the amounts for organizational and operating expenses, including wages, could not be attached.

The representatives of "Dobra, Coşoreanu & Dobra" said that the foreclosure of the AVAS has nothing to do with the payments to the victims of the National Investment Fund (FNI).