The year 2012 looks set to be the busiest in the entire history of the Bucharest Stock Exchange in terms of promises, as the government has at least six stock offerings scheduled, of which four come from new companies. Over the last seven years, the government has only listed two state-owned companies.
The first on the list is the sale of a 15% stake in Transelectrica, the holder of the electricity transmission monopoly in Romania, scheduled for the end of February. The state should pocket more than EUR40 million from this sale, considering the current capitalization of the company.
Next in line is the sale of 15% in Transgaz (the national gas transport company) in April or May and then Romgaz, the most profitable state-run company, whose public offering is scheduled for July or September at the latest.
“There is a strong interest in Romgaz. Every big name on the market is interested in brokering the sale of this stake,” said Florin-Laurentiu Vladan, head of the Office of State Ownership and Privatization in Industry (OPSPI) at the first public conference he attended.
He believes the offerings for the listing of Hidroelectrica and Nuclearelectrica will be conducted some time between October and December 2012. “We made this schedule and there is no reason today for us to say we won’t be keeping it,” Vladan said.
He took the helm of OPSPI in November, after his predecessor, Victor Cazana, was fired by the Economy Minister Ion Ariton because of the slow pace of the privatization process.
The capital market in Romania needs new listings like air, considering local investment and pension funds have been complaining that they have no investment options and are forced to buy stock from the markets in Poland, Austria and Germany. On the other hand, the government can raise hundreds of millions of euros from the public offerings.
The government has promised to float state-run companies every year, and even had laws and emergency ordinances for that, with very few achievements, though, which was partly due to the unfavorable context of the last few years. The government failed to sell 10% in Petrom on the stock market this summer. Petrom is the largest Romanian company and those who handle privatizations say they learnt from this failure and are ready to begin new offerings.
Still, investors warn that the deregulation of the capital market is necessary, as is the creation of a friendlier investment environment, by raising the SIF (regional investment funds) stake cap, so that the government could get a better price for the stock sold.
(English version by Loredana Fratila-Cristescu)