For instance, some of the executives of Romania’s largest bank, BCR, made hundreds of thousands of euros when the bank was privatized, after the employees got 8% in it at a 21 times lower price than Austria’s Erste paid to get the controlling interests.
“I asked and was told everybody has to get the same conditions to buy on the stock market. Anyway, at the privatization of the branches (that went to i.e.) of E.ON, Enel and CEZ in 2005-2007, the employees had a contract signed stipulating they were to get 10% of the shares at the sale price and did not get them because the government did not want to,” says Marian Zaharie, representative of the labor union of Electrica.
Other unions were more active and got various benefits for their employees. For instance, the union at Nuclearelectrica negotiated a higher discount, 8%, in last fall’s IPO, while Hidroelectrica union proposed to have 10% of the shares issued at the time of the listing (15% in the company) allocated to employees for subscription exclusively.
Brokers even set up an office at Nuclearelectrica to make it easy for employees to subscribe while the IPO was conducted last year.
About 98% of the 11,245 employees of Electrica were union members on March 31, 2014, according to the company’s issue prospectus.
The representatives of the Employee Association of Electrica and Gabriel Dumitrascu, the head of the privatization division of the Department for Energy could not be reached for comment by press time on Sunday.
“Had the Electrica labor union asked for such a benefit at the listing of the company on the stock market, I think they would have received it, but they weren’t interested unlike Nuclearelectrica, where the union came up with the idea of a 8% discount of the IPO sale price,” says Dumitru Beze, chairman of the Association of Capital Market Investors (AIPC).
“As far as I know there was no such request from the Electrica union and this shows the employees are not proud of their company. I don’t think it was the government’s duty to give employees an option to the IPO unless they requested it.”
The Polish government made sure the employees of the state-owned companies had special tranches allocated to them during the major privatizations conducted via the stock market.
The Bucharest Stock Exchange could have gained several thousand new investors following the Electrica IPO had the employees been motivated in some way to subscribe to it.
(English version by Loredana Fratila-Cristescu)