State-owned energy companies will have private management, as agreed with the IMF

Ion Ariton, the Minister of Economy, Commerce and Business Environment(MECMA) met today with the joint mission of IMF, World Bank and European Commission. The mission expressed positive feelings based on the preliminary economical dates, for the eight energy companies in the ministerial portfolio, for the first 6 months of 2011. Moreover, Ion Ariton’s plan for reorganizing the energy sector in two companies, excluding Hidroelectrica and Nuclearelectrica, has been agreed by the IMF.

The updated plans for privatization, liquidation or restructuration of state owned companies stipulate that the Romanian government stake of 9,84 percent at Petrom will be on public sale again on the capital markets at the beginning of 2012. Stakes of 15 percent at Transelectrica and Transgaz will be for sale in an SPO (secondary public offering) until the end of 2011. Romgaz is preparing for an IPO (initial public offering) at the Bucharest Stock Exchange and a 15 percent stake will go through an SPO. Hidroelectrica and Nuclearelectrica are also preparing for an IPO that will lead to a 10 percent increase in capital.

Romania’s Letter of Intent with the IFM stipulates that state-owned companies will need to have regular independent audits, to report and publish financial data quaterly ensuring that OECD principles of corporate governance are applied. For companies remaining under state control, key management (CEO and CFO) positions will be filled after an international search process, and will be given sufficient autonomy. In addition, board members of these firms will be selected by shareholders and vetted by independent experts. This process will start in the second half of this year.

Restructurations of the state-owned energy companies include reducing personnel, separating viable and nonviable assets and undertaking steps towards privatizations.

The eight energy companies in MECMA portfolio monitored by the IMF are: Termoelectrica Company, ELCEN Company, Coal National Company, Oltenia Coal Company, OLTCHIM Company, Turceni Energy Complex Company, Electrica Transilvania Nord Distribution Company and Electrica Serv Company.