MIRCEA URSACHE WENT TO THE U.S. WITH A CATALOGUE OF COMPANIES WORTHY OF BEING LISTED Romgaz and Conpet qualify for new offerings

Romgaz and Conpet could be privatized through the stock market, according to the inventory drawn up by the Financial Oversight Authority and the Ministry of Finance, which was presented by Mircea Ursache, the vice-president of the ASF, at the Economic Mission of the Romanian Chamber of Commerce and Industry in the US.

Also, Hidroelectrica would have to wait at least eight months after exiting insolvency before being listed, and for 12 other companies the approval of the majority shareholders is needed for an IPO. Companies like the Oltenia Energy Complex, the Romanian Postal Office, the former Romtelecom (currently Telekom România) and other nine companies subordinated to the Ministry of Transports have already had their privatization strategies approved, as is the case of Rompetrol Rafinare.

At the Romanian Postal Office (Poşta Română), the privatization with the Belgians of "bpost" has failed, and the management is thinking of preparing the listing on the Bucharest Stock Exchange, while in the case of Telekom România (the former Romtelecom), the Ministry of the Information Based Society is waiting for an opinion from the consultants concerning the privatization method.

In April, the Government announced that it approved the creation of an operative working collective, tasking the Ministry of Finance (MFP) and the Financial Oversight Authority (ASF) with coordinating the schedule for the listing of companies on the Stock Exchange, so that new offerings would start being made as early as this autumn.

This has now become impossible, because the quickest offers would take at least eight months to be ready, according to the documents of the working group.

Just last week, businesspeople have complained that there is a gap between what is happening at the level of the Government and what is happening in the Parliament or in the lower levels of the Ministry, with one example in that regard being the support for new offerings.

Florin Pogonaru, the president of the Businesspeople Association of Romania said the following on Thursday: "In the Government, we have a firm and clear support, and in the Parliament, or even from some of the ministers, we keep hearing that no more such privatizations are going to happen".

Regardless of the political decisions, the list drawn up by the Ministry of Finance and the ASF provides a picture of the state's holdings and of their status. For instance, 410 companies which the state has stakes in are insolvent or bankrupt, and other 127 are subject to garnishments.

The authorities have identified 12 strategic companies, which can not be privatized, such as Nuclearelectrica, Transgaz, Transelectrica or the National Uranium Company. Since the first three are already listed on the Bucharest Stock Exchange, the document is probably referring to the sale of the majority stake.

• Romgaz and Conpet, the easiest to take public

The easiest stakes to sell through offerings on the stock exchange are those in Romgaz and Conpet, according to the evaluation by the ASF and the Ministry of Public Finance.

For Romgaz, in which the state still holds 70.01%, the authorities recommend a potential IPO, but without reducing the stake held by the state which allows it to influence the major decisions in the General Shareholder Meeting (66.67%) and only if the company provides a thorough justification for attracting resources through mechanisms of the stock market. A secondary public offering is also being considered, but which may not exceed 4.67%, so that the majority stake isn't reduced.

Romgaz meets all the ratio requirements for 2014, as recommended by the ASF.

A similar situation is also happening at Conpet, where a potential IPO must also take into account the fact that the stake of the government which grants it the right to influence the major decisions (51%) in the General Shareholder Meeting should remain intact and said IPO is only recommended if the economic operator thoroughly justifies the raising of funding through stock market mechanisms. A secondary public offering may not exceed 7.72%, in order to avoid reducing the majority stake. The government currently holds 58.72% of Conpet.

Oil Terminal does not completely meet the ratios recommended by the ASF, but an IPO or secondary offering can also be taken into consideration in its case, under the same terms, so that the state would retain its control.

In the case of Hidroelectrica, which is insolvent, the document mentions that there exists a government decision to conduct an IPO for the sale of newly issues shares amounting to 15% of the existing share capital, but the listing can take eight months after the company exits insolvency.

• The sale of 8% of Petrom to its employees coming next

The ASF and the Ministry of Finance remind that there is the legal provision which allows the sale of up to 8% of OMV Petrom (in which the state holds approximately 20.64% of the shares) to the employees, after the government passes a decision in that regard.

The operation requires the agreement of the majority shareholder, according to the ASF. Furthermore, there will also be a sale to OMV of the newly issued shares resulting from the increase of the share capital with the value of its plots of land.

The list of the working group also includes GDF Suez Energy România (in which the state holds 37%) and E.ON Energie România (31.82%), which, however, requires the agreement of the majority shareholder for conducting a primary/secondary offering and for the beginning of trading. In these cases, the provisions of Government Ordinance no. 31/2004 may be applied concerning the sale of up to 10% of the shares to employees in the gas distribution sector.

Electrica can also sell its holdings in its subsidiaries FDEE Electrica Distribuţie Muntenia Nord, FDEE Electrica Distribuţie Transilvania Nord, FDEE Electrica Distribuţie Transilvania Sud, subjected to shareholder approval.

SAPE can also sell its stakes in Enel Distribuţie Dobrogea (24.90%), Enel Distribuţie Banat (24.87%), Enel Energie (37.00%), Enel Distribuţie Muntenia (23.57%), Enel Energie Muntenia (23.57%).

For the privatization of Rompetrol Rafinare SA, the Government has decided to sell, through an open outcry call for tenders, 11,775,349,451 shares, representing 26.6959% of the company's share capital.

Also, according to some decisions made in 2006, the Ministry of Transport was supposed to sell on the stock market, a 5% in each of the following: Tarom, Aeroporturi Bucureşti, the Kogălniceanu Airport, "Traian Vuia" and others.

Prime-minister Victor Ponta had many public statements in that regard, in which he expressed his support for privatizations performed through the stock market, but this year, the government did nothing in that regard, which means that the BSE may not see any offer on the main market.