The official opposes the Government’s initiative to also list the company on a foreign stock exchange.
Appointed in April to run ASF and confirmed in July, Dan Radu Rusanu has become familiar with the interests, as well as with the troubles of the local capital market, which has been significantly hurt by the crisis in the past few years and by a lack of interest from the state, which has failed to help the market’s development through privatizations.
The capital market community was angered by public statements of Government officials in charge of privatizations ,who said Romgaz’s listing should be done concomitantly on two bourses, in Bucharest and in London or Warsaw, because the Romanian market is anemic. They said the Bucharest bourse could not ensure the success of a EUR600 million offering, the amount that the Romanian state wants to raise from selling Romgaz shares.
In the dispute between the Government and the Romanian capital market about where it is best to list Romgaz, the president of ASF is on the side of the capital market. ASF is the institution that will give the green light to Romgaz’s listing prospectus.
“In the discussions I have had with the IMF mission in Romania I have insisted that the listing of Romgaz be done exclusively on the local market. I was against the dual listing of Romgaz. One of the reasons why the privatization of state-run companies has been agreed with the IMF is in order to develop the Romanian capital market. This should be taken into account,” says Dan Radu Rusanu, president of ASF.
The Romanian Government has committed to the IMF to do a dual listing of Romgaz Medias, according to a draft of the letter of intent seen by ZF, and Government sources have confirmed the information. The Government wrote in the letter of intent that “approval for the dual listing will be received in advance from the Financial Supervisory Authority, an environmental study will be done, and the taxation regime will be clarified for Romgaz shares bought from a foreign stock exchange.
Before coming to ASF, the authority in charge of supervising non-banking financial markets set up on April 30, Rusanu was an influential leader of PNL party, a deputy and president of the Budget-Finance Committee within the Chamber of Deputies.
The Romanian capital market is going through an extremely difficult time and only the state’s privatizations could help it out. Although the Bucharest bourse is in great need of the state’s support, and the offering to sell 15% in Romgaz for EUR600 million could be the biggest listing in Romania, the Bucharest bourse is helpless as the Government starts to weigh the possibility of also listing Romgaz on a foreign stock exchange, the London or the Warsaw exchange.
“It is true that the London Stock Exchange can more easily absorb a EUR600 million offering, but the consultant of the Romgaz offering should make efforts to make the offering more attractive and bring foreign investors here.”
The coordinators of Romgaz’s stock exchange privatization are advised for this transaction by a consortium led by US investment bank Goldman Sachs, which also includes BCR, Erste and Raiffeisen Capital & Investment. The officials in charge are afraid they won’t be able to sell the full 15% stake in Romgaz on the Romanian bourse, considering that the estimated amount of EUR600 million would be ten times larger than the largest offerings finalized so far on the Bucharest bourse.
According to sources familiar with the situation, the proposal for the dual listing came specifically from the consortium of brokers responsible for intermediating the listing.
A dual listing would be a first for a Romanian company. In the past Romanian pharmaceutical group A&D Pharma was listed on the London Stock Exchange. But the move was a failure because four years later, in 2010, the company got delisted. The shares of the group, had come to be traded at half the listing price.
It is difficult to understand why the Government would go for a dual listing of Romgaz, which practically forces the Romanian state to take part in helping develop another capital market than the Romanian one. In fact, neither the IMF nor the Romanian Government have lifted a finger in the past ten years when a lot of private companies were delisted from the Romanian stock exchange by the foreign multinationals that control them.
The Bucharest stock exchange lost companies such as Dacia, Sidex, Ursus, Lafarge, Romcim, Silcotub. Had these companies still been stock-exchange listed, the Romanian capital market would have definitely been stronger and better equipped to handle a EUR600 million offering such as the Romgaz one.
Gas producer Romgaz is the most profitable state-run company, with a profit of EUR279 million last year and of EUR175 million in the first half of this year, 38% more than in the similar period of last year.
The listing of Romgaz is set to take place this autumn.
(English version by Daniela Stoican)