One of the business events that stand out in 2013 in Romania is OMV Petrom’s record-high profit expected for 2013 – EUR1 billion.
“I am determined to make Petrom not only into the largest Romanian company, but also a profitable one,” said Mariana Gheorghe back in 2006, when she took over as CEO of the only Romanian oil and gas producer.
At the time Petrom’s profit was EUR648 million and its turnover reached EUR3 billion. In the first nine months of this year’ the company’s net consolidated profit has reached EUR833 million and Petrom’s turnover hit EUR4.1 billion. So the oil and gas producer has every chance of ending 2013 with a historic–high profit of EUR1 billion.
Transport
Bridge over Danube: A major event this year was the opening of the second bridge to link Romania to Bulgaria in over a century, the Calafat-Vidin bridge, which cost EUR300 million. The first bridge to connect the two countries was opened more than a century ago, the Giurgiu-Ruse bridge.
Highway sections: 2013 brought 78 new km of highway. Romania has thus reached a total highway network of 608 km.
Failure of CFR Marfa sale: The privatization of CFR Marfa, the largest freight railway transporter, failed after the company designated winner of the auction organized by the Romanian state, Grup Feroviar Roman (GFR), controlled by Gruia Stoica, did not pay the EUR170 million it had left to pay in order to take over the 51% stake.
Real estate
New mall in Bucharest: 2013 saw the first mall opening in Bucharest in more than three years. Promenada Mall was opened in northern Bucharest in October, after a EUR130 million investment.
Investor of the year in real estate: South-African investment fund NEPI sealed the largest transactions in real estate this year, both in retail and on the office segment. In December NEPI paid EUR81 million for shopping mall City Park in Constanta, and back in February 2013 the South-African fund bought The Lakeview office building in Bucharest for EUR61.7 million.
Banking & Macroeconomics
Bank of Cyprus crisis: The Romanian subsidiary of the Cypriot bank suspended its operations for a month amid the crisis in Cyprus early this year and clients’ deposits were ultimately salvaged by being transferred to Marfin Bank.
Citibank – Raiffeisen transaction: Citibank decided to abandon its Romanian individual clients business and sold its entire loan portfolio of over EUR90 million, plus deposits of around EUR175 million, to Raiffeisen.
RBS – UniCredit transaction: British RBS decided to work only with big companies and sold retail assets of EUR315 million to Italian UniCredit, as well as deposits of EUR230 million, in the biggest portfolio sale.
Axa – Astra deal: After entering the Romanian market in 2010 with big ambitions, French Axa gave up after only three years and sold its life insurance estimated at EUR7 million per year, with a portfolio of around 40,000 contracts, to Romanian businessman Dan Adamescu, who controls insurer Astra.
ROBOR at historic lows: The interbank interest rates used for calculating the price of loans in lei fell significantly in 2Q, with one-day ROBOR approaching 1%. Three-month ROBOR fell slightly below 2.5%, and the six-month rate fell below 3%.
Central bank governor cuts its key interest rate by 1.25%: Central bank BNR gradually cut its reference rate over a five-month period to a record-low 4% a year, in line with the commitment to stimulate loans in lei by bringing interest rates on loans in Romanian currency closer to those on euros.
New lows for the cost of external financing: Romania borrowed from the US market for the second year in a row, with the interest rate plummeting to 4.375% from 6.75% in 2012. Romania also launched two sets of eurobonds where the interest rate was 4.625% per year.
Chinese assault, projects of at least EUR5 billion: A delegation led by Chinese PM Li Keqiang came to Bucharest in November to discuss a huge package of investments in infrastructure, energy, agriculture, IT, of between EUR5 and EUR8 billion.
Non-performing loans climb towards 22%: The ratio of non-performing loans, which are stifling the Romanian banking system and are keeping lending from a seeing a rebound, continued to climb towards 21.7% in October, 3.5% more than in 2012.
Energy
Less green subsidies: In July the Romanian government decided to cut the green energy support scheme by delaying the granting of a number of green certificates, until 2017-2020. The measure was taken mainly amid pressure from industrial companies. Investments of around EUR4.5 billion are affected.
Shale gas protests: The Romanian village of Pungesti became the scene of major conflicts between the local community and the gendarmerie. The latter acted in defense of US Chevron, which officially announced plans to look for shale gas in Romania. Rosia Montana gold mining project and shale gas are among the few investments against which Romanians have taken to the streets.
Agriculture
No. 5 in grain production: Romania climbed to no.5 this year in the ranking of European grain producers, with a harvest of 20.4 million tons, up 60% from last season. The EU’s top grain producers are France, Germany, Poland and Spain.
Foreigners want arable land: Foreign investors continued this year to show interest in Romanian farmland, which is undervalued compared with land in western Europe. UK investment fund Insight Investment sealed a record-high transaction of EUR30 million to buy the 16,000 – ha farm of Agricom Borcea in Calarasi, while German group Agrarius announced its intention to double its farmland to 6,000 ha.
Industry & Retail
Replacing Nokia: German group Bosch and Italy’s De’Longhi have this year limited the effects of Nokia giving up its Romanian plant in Cluj. The two companies invested over EUR100 million in total, for starters creating 600 jobs in industrial park Tetarom in Cluj.
Daimler, EUR300 million in Sebes: German group Daimler announced in April it would invest over EUR300 million in Romania to expand production of gearboxes for Mercedes-Benz at the Star Transmission local subsidiary in Sebes.
Kingfisher taps Romanian DIY market: British group Kingfisher announced in April the signing of an agreement to buy Bricostore and the transaction worth EUR75 million was closed at the end of May. The Bricostore chain will be rebranded Brico Depot.
Stock Exchage
Romgaz listing: The event of the year on the Romanian bourse was the initial public offering at Romgaz Medias (SNG.RO). The Bucharest bourse shared the laurels of this listing with the London Stock Exchange. The Romanian state made EUR391 million from selling 15% in Romgaz, the largest transaction in the history of the Bucharest bourse.
Listing of Nuclearelectrica: The initial public offering at Nuclearelectrica was the first listing of a Romanian state-run company in the past five years, opening the way for the stock exchange privatizations that the Romanian government committed to with the IMF. The completion of this transaction was an extremely important signal for the Bucharest stock exchange.
AdePlast IPO failure: The failure of the initial public offering of the construction materials producer AdePlast showed that bourse investors are not very selective yet, although there is money available on the market, and that they still prefer the safety of state investments.
IT&C
Biggest private financing: Telecom company RCS&RDS, controlled by businessman Zoltan Teszari, launched a EUR450 million bond in November and took out loans of EUR300 million to refinance debts. RCS&RDS had turnover of EUR623.8 million in 2012.
Start of largest merger in telecom: German Nikolai Beckers, the new CEO of Cosmote and Romtelecom, sped up the integration of Cosmote and Romtelecom since he took over in April. The two companies now have a joint top management for the first time. The two companies, which are controlled by Greek OTE, could merge in 2014.
Biggest transaction in IT: US investment fund Francisco Partners bought Avangate, a provider of IT solutions and services founded in 2006, whose majority shareholder was Romanian Radu Georgescu.
(English version by Daniela Stoican)