THE SECONDARY OFFERS SCHEDULED ON THE STOCK EXCHANGE One gets postponed, another is still proceeding

• The secondary public offering for 21% of Alro, postponed

• The prospectus for the sale of 9.8% of "Petrom" nearing completion

Vimetco, the majority shareholder of Alro Slatina, has postponed the Secondary Public Offer to sell 21 million shares of Alro Slatina (ALR) for approximately 133 million Euros on the Bucharest Stock Exchange (BSE). This means that the Exchange now relies only on the Romanian state, which wants to sell 9.8% of "Petrom" for things to heat up this summer, in an anemic market.

Rumors concerning the postponing of the offer of "Alro" Slatina (ALR) were confirmed, on Friday, by the company"s officials, who cited "adverse market conditions" as the reasons behind the decision, without providing additional explanations.

"Vimetco (ed. note: the majority shareholder) believes it is not in the best interests of Alro or its shareholders to proceed with an SPO at this point in time", according to a press release sent to the Bucharest Stock Exchange and to the London Stock Exchanges, where the global depositary receipts of "Vimetco" are traded.

However, the offering of "Petrom" (SNP) will proceed as planned.

Apparently, investors that wish to subscribe shares of "Petrom" sold by the state will need to have their cash ready for July 11th, but this deadline, as well as the rest of the details, will be submitted for approval in a government meeting.

Sources that did not wish for their names to be disclosed, said: "The offering of Petrom will be launched between July 11th -July 13th and is expected to be completed by the end of the month.

The prospectus for the offering is set to be submitted on Monday (ed. note: today) or on Tuesday to the Romanian National Securities Commission (CNVM), and on Wednesday it will be discussed in the government meeting, provided everything remains on schedule.

There will be a price band for investors looking to subscribe in the offering, with a minimum and a maximum price, meaning that the market will play a significant role in setting the price".

"In the beginning, it was planned that 20% of the block of shares would be offered to retail investors, and the rest to institutional investors. Right now, it is currently being discussed whether retail investors should be offered 10% or 20%".

The OPSPI (the Office For The State"s Interests and Industrial Privatization) had announced since back in May, that the secondary public offer initiated by the Romanian state to sell 9.84% of "OMV Petrom" (out of the total of 20.63% it holds in the company), may be divided into two tranches: one intended for institutional investors and one intended for individual investors, after investors lobbied for this purpose.

The secondary public offering is valued at 500 million Euros. In the beginning of last month, Minister of the Economy Ion Ariton said that it had become his goal to make more than 600 million by selling the 9.86% minority stake in Petrom. PM Emil Boc also said in April, that the amount resulting from the sale of the block of shares that the state holds in Petrom will exceed 600 million Euros, which was what the Năstase government received as payment for the whole company.

• Valentin Ionescu considers that there was enough money in the market for both secondary offerings

The sale of 21% of "Alro" was announced on May 19th, and was scheduled to take place just prior to the secondary offering for 9.8% of "Petrom", scheduled to complete in July. Had it been successful, the secondary offering for "Alro" would have amounted to about 133 million Euros, according to Friday"s price, making it the largest private offering on the BSE.

The company"s press release on Friday leaves room for interpretation on the reasons for postponing the secondary offering.

Valentin Ionescu, the managing director of the Bucharest Stock Exchange considers that the decision was made after testing the levels of investor interest, and was also influenced by the worsening of the Greek situation.

"Most likely the consortium which intermediates the sale offer performed a < book building > (tested the interest in the offer) and this probably suggested that it would be best to postpone the offer", Valentin Ionescu said, and he added: "Still, I believe that there is enough money available for both secondary offerings scheduled right now, the one of Petrom, as well as the one of Alro.

For Alro it would be a very good thing if it could increase its free-float, it would attract the attention of major portfolio investors and it would make it a blue chip of the BSE once again. It needs to be said that one of the reasons behind the postponing (the most important) is the uncertainty which hovers over the sovereign debts of Greece, which are causing investors to adopt a "wait-and-see" attitude. Once this situation is over, investors will reenter the stock markets in full swing".

Brokers who did not wish for their names to be disclosed consider that the ambiguous information contained in the press release of "Alro" is actually trying to conceal the fact that the company wasn"t offered a good price per share.

"What < < adverse market conditions > > means is that they failed to get the price that they wanted", the quoted sources said. Other sources said that the investors targeted by the Alro secondary offering may have viewed the Bucharest Stock Exchange as too small, which caused them to avoid it.

Mihai Căruntu, the head of the capital markets research team of BCR, considers that "Vimetco" has decided to wait and see the outcome of the secondary offering of "Petrom", as well as the improvement of Romania"s macroeconomic indicators, in the second half of the year.

BCR analyst said: "Most likely the majority shareholder of Alro has decided to wait for the outcome of the offering of Petrom, leaving the state to do the work of attracting foreign investors on the Stock Exchange and thinking that, if the Secondary Public Offering gets fully subscribed, this increases the odds of the secondary public offering of Alro becoming successful later".

Another reason for postponing Alro"s secondary offer would be Romania"s macroeconomic evolution. Even though technically speaking, Romania"s economy has exited the recession, the recovery is nevertheless slower than in other European countries, and will most likely improve by autumn. Besides, summer isn"t exactly an auspicious period for sale offers".

Some people claim, however, that it is not the price obtained in the book-building process which caused the offering to be postponed, since the book-building wasn"t even carried out, but rather the fact that under the current negative market conditions, the sale would have been made to investors interested in large blocks, which wouldn"t have helped increase liquidity in the secondary market.

"Alro" has a market capitalization of 2.69 billion lei, according to Friday"s price, of 3.77 lei/shared. The company reported a net profit of more than 120.2 million lei in Q1 2011, nearly double over the similar period of 2010, when it logged a net profit of 50.5 million lei.