“The first step towards resuming the privatization process for Posta Romana is converting its historic debt into shares (…) If the conversion is accepted, the Romanian state will have a certain amount of time to privatize its postal operator. Should we fail to achieve privatization within that amount of time, the debt conversion will be annulled and we’ll be back to square one,” Cotovelea said at the ZF Mobilio ’14 conference.
Romania attempted to privatize its postal operator early last year but no interested investors submitted bids by the May 28, 2013 deadline.
Posta Romana general manager Ion Smeeianu said at that time investors were reticent because of the company’s rickety financial situation.
Following the failed privatization attempt, the government set a new deadline for June 30, 2014. In September last year, the government approved a plan to convert the postal operator’s debt to the state into shares before putting it up for privatization again.
Cotovelea said Thursday the European Commission will likely approve the debt conversion plan later this month.
“Once we get approval, we will resume the privatization process, inviting prospective investors to look at the postal company’s financial records and the start negotiations with interested investors. We estimate we could have preliminary bids submitted in June, July and August. If we fail to find an investor to buy 51% of the shares and have the financial power to make investments, we’ll go with an IPO, which would take longer and which we estimate would end sometime in late 2015,” the minister said.
Cotovelea added the IPO could be launched on the local stock market and/or an international market.
“We’d prefer direct negotiation. Once we have the approval of the European Commission, we’ll set a privatization calendar,” Cotovelea said.
Posta Romana is the largest local postal operator with 5,700 offices countrywide. It is 75% owned by the state and 25% by investment fund Fondul Proprietatea (FP.RO).
The company had total debts of RON568.2 million at the end of 2012, 2.9% higher than in 2011.
According to preliminary results, in 2013 Posta Romana had exploitation revenues of RON1.166 billion and expenses of RON1.193 billion. The company posted an exploitation activity loss of RON27.62 million, more than nine times higher than estimated in its budget.
In the postal operator’s budget for 2013, approved by government decision, exploitation revenues were estimated at RON1.231 billion, while expenses were seen at RON1.234 billion. The company’s total revenues were estimated to reach RON1.256 billion and Posta Romana was expecting to break even.
The company amassed loses of RON532.9 million in 2009-2012 although it estimated to turn a profit each year. The last time Posta Romana turned a profit was 2008, when its gross profit was on the plus side but still ten times lower than estimated in the budget.
In 2013, Posta Romana cut its staff numbers by 16%, laying off around 5,400 people.