The ministry wants to compile by February 16 a shortlist of brokers willing to offer professional advice on selling CFR Marfa. The shortlist will be published on the institution’s website on February 21. Bidders have until March 12 to submit final offers.
According to the announcement, the ministry wants to select an investment bank or a consulting firm specializing in acquisitions and privatization.
The Romanian Government pledged in September 2011, CFR Marfa will be among the first nine state companies to have private management. The state also committed to selling 20% of its stock.
A few weeks later, the country’s highest defense body CSAT decided the state will sell over 50% of its stake in the company.
In December, the Government and the IMF agreed to remove CFR Marfa from the list of state-owned companies to be run by private managers. Authorities decided the railway operator will be sold to a strategic investor by end-October 2012, with the support of the European Bank for Reconstruction and Development and of the International Financial Corporation.
The auction winner will propose privatization strategies, will evaluate CFR Marfa to determine its shares’ market value and will offer technical assistance to carry out the privatization process. The privatization strategy will be analyzed by the ministry and will have to be approved by the Government.
Bidders will have to prove their experience in acquisitions and privatization, and that they had successfully brokered the privatization of stat-companies in Romania, the European Union or the United States, with turnover of at least EUR100 million, as well as of railway operators with turnover of over EUR20 million.
According to the announcement, CFR Marfa was ranked 10th in 2010 regarding the volume of freight transported by rail, with 31 million tons. It had about 8,268 employees at the end of last year.
According to CFR Marfa’s draft 2012 budget, the operator registered losses of 133.5 million lei (EUR30.7 million) last year, up 67.9% compared to the level approved by the Government, of RON79.5 million.
CFR Marfa last posted profit in 2007, of RON6.12 million, down 85.7% on the year, according to Finance Ministry data. The railway operator registered losses of RON169.44 million in 2008, of RON341.95 million in 2009 and of RON535.26 million in 2010.
CFR Marfa ended 2011 with debts of RON1.25 billion, down RON200 million on the year, and estimates debts will rise 4% in 2012, to RON1.3 billion. (EUR1=RON4.342)