Victor Cazana: The intermediary of the Secondary Public Offering of "Transelectrica" will be selected in October

The announcement for the selection of the intermediaries that will handle the secondary public offering for 15% of the shares of "Transelectrica", will be made in the beginning of next week, Victor Cazana, the head of the OPSPI (Office For The State"s Interests and Industrial Privatization) said during the conference celebrating five years since the listing of "Transelectrica".

He said that the Ministry of the Economy has purchased consulting services for the drafting of the tender book for the intermediaries.

"We hope to make the announcement for the beginning of the selection process for the intermediaries and to complete the process in October", Victor Cazana said.

As for the launch of the Secondary Public Offerings of "Transelectrica" and "Transgaz", the head of the OPSPI doesn"t expect them to take place this year.

"Realistically speaking, I do not think there are too many odds of these offerings taking place (ed. note: "Transelectrica" and "Transgaz")".

However, the officials of the Ministry of the Economy have a different opinion. They say that they are expecting the secondary public offerings for "Transelectrica" and "Transgaz" to be launched by the beginning of 2012.

The minister of the Economy, Ion Ariton, was even more optimistic two months ago. In July, he said that the ministry he is leading intends to sell 15% of "Transelectrica" on the stock exchange in October, and 15% of "Transgaz" in December.

• Cazana: The discount is a touchy subject

Victor Cazana said that there are numerous lessons that could be learned from the failure of the "Petrom" secondary offering, most of them very nuanced, but using these lessons could bring added value in the listing of 15% of "Transelectrica".

He added: "The discount of the offering (ed. note: Transelectrica) is a sensitive subject and many are wary of discussing it. It is very difficult for Romania to offer discounts. This is a dilemma. If we want to make the deal at any price, we could do it. That"s not the point. It is a matter of how valuable the state is, the company itself, the capital market. We can"t just sell our assets for pennies. On any journey, the first step is the most important".

Valentin Ionescu, the general manager of the BSE also emphasized the idea that the discount offered is very important for the success of an offering, especially when there are turbulent periods in the market. Furthermore, the state needs to focus on the listing as an alternative to private management, he added.

"Transelectrica" is the first Romanian companies in which the Romanian state is a majority shareholder which began the government project "A Strong Market - The Development of the Capital Market", which promoted an initial public offering to increase the company"s share capital by 10%, by selling 7,329,787 new shares, Horia Hăhăianu, the general manager of the company said yesterday. He added that, until now, the company"s market capitalization went as high as 336 million Euros.

The company has a share capital of 733,031,420 lei, divided into shares with a face value of 10 lei/share. The Ministry of the Economy, which is the majority shareholder of "Transelectrica", owns 73.68% of the shares, whereas the "Proprietatea Fund" has a stake of 13.49%.

According to an appendix to the letter of intent sent to the International Monetary Fund, the government has pledged to sell 20% of "CFR Marfă", a maximum of 20% of "Tarom", 10% of "Petrom", 15% of "Transelectrica", 15% of "Transgaz", 15% of "Romgaz" and at least 10% of "Hidroelectrica" and "Nuclearelectrica".