The strategy of the Government and of the IMF: The new energy companies, to be privatized by June 2012

The creation of the new Oltenia and Hunedoara energy companies will be completed by the end of June 2012. The process will also involve layoffs at some of the entities that will become part of the two new companies, as revealed by the latest letter of intent signed by the Government and the IMF, according to Mediafax.

At the first, the Government intended to merge the main coal and energy producers into two national companies, called Electra and Hidroenergetica, but announced that it given up on this project because of legal issues, and is also considering the alternative of creating two smaller energy companies, called the Oltenia and Hunedoara Energy Complexes.

The Hunedoara Energy Complex will consist of the Paroşeni and Mintia thermoelectric plants and of the mines of the National Coal Company (CNH) deemed viable. The Oltenia Energy Complex will consist of the Oltenia National Lignite Company (SNLO) and the thermoelectric plants of Craiova, Turceni and Rovinari.

The letter of intent signed by the Government and the IMF at the end of evaluation mission of July-August, approved by the Executive in mid-September, stipulates that by the end of this year a new energy company would be created through the merger of the Oltenia National Lignite Company (SNLO) and the thermoelectric plants of Craiova, Turceni and Rovinari and that the company would be privatized by the end of June 2012.

The privatization would be made either through an IPO or by selling the company to a strategic investor.

The company resulting from the merger of the viable mines of the National Coal Company (CNH) and the thermoelectric plants of Paroşeni and Mintia, will also be privatized by the end of June 2012.

The government will hire consultants for the privatization processes by the end of March 2012. According to the document, the restructuring of the units for the purpose of privatization would also require layoffs, with at least 900 jobs to be eliminated by the end of October, and 200 more jobs to be removed from the organizational structure of the Turceni energy complex.