"Rodipet" no longer wants to be monitored by AVAS and promises to pay off its debts within six months

Ştefania Ciocîrlan

The management of "Rodipet" has asked AVAS (the Authority for State Assets Recovery), to stop its post-privatization surveillance of the company alleging the majority shareholder of the company, "Magnar Two" SRL, carried out all its obligations undertaken through the privatization contract.

The request of the management of "Rodipet" comes approximately one month after the Board of Directors of AVAS has decided the revocation of the contract and the reinstatement of the state as majority shareholder alleging that "Magnar Two" SRL failed to comply with several requirements on investments in developing the company.

Florin Lungoci, general manager of "Rodipet", claims that he hasn"t received any official notification from AVAS about the revocation of the contract, and he says that the company even fulfilled in advance some of the investment obligations undertaken through the contract.

"According to the contract, we have taken on the obligation to invest 3.75 million Euros in the development of Rodipet over a five year period, but in total we have invested over EUR 20 million so far. The amount of 832,000 Euros, that represents the investment we were required to make for 2008, has been already invested in 2006", Mr. Lungoci said, adding: "AVAS" notifications say that the decision was made because the buyer failed to produce evidence of making the investments required through the contract. This is untrue. We have sent four notifications certified by our auditor, showing the fulfillment of all the obligations we have taken on.\"

The chairman of AVAS, Mircea Ursache, said that officials of "Rodipet" have to produce accounting records to prove that the investments were made.

"We cannot accept statutory statements, we need to see accounting deeds\".

If they do indeed have these papers, AVAS has no issue with the company", Mr. Ursache said.

"Rodipet" officials have also asked AVAS to grant them a state aid by selling 30% of the company"s shares to the state at the market price. According to Rodipet"s management, the state aid is supposed to compensate the damage incurred by the company as a result of the state"s failure to uphold its contractual obligations.

"Rodipet""s management promised that within six months from the completion of the privatization contract, the company would be able to fully meet its obligations towards press publishers. The company currently has around EUR 3 million in trade debt and holds around 37% of the press distribution market.