Majority stakes in Romanian defense companies no longer up for sale

Newsroom 21/11/2014 | 14:56

he Romanian government will no longer sell its majority stakes in companies operating in the defense industry, keeping minimum 50% at their privatization, and will focus on strategic investors with proper know-how and technologies.

The Government’s intent to secure half of defense companies’ share capital, at the time of their privatization, is indicated in the new law for the defense industry. In the previous draft, the Government stated its intent to maintain only 20 percent of a company’s share capital after its privatization in this sector.

The change comes as a result of the current geopolitical climate, in which Romania has decided to pay bigger attention to the defense sector.

A strategic investor is defined as the individual or group which posesses the financial, technical and managing resources necessary to attain the company’s development objectives. The investor would take over all existing staff at the time of privatization and he or she is obligated to maintain their jobs for at least five years.

Changing the privatized company’s activity or destination for its production capacities is possible only by gaining the approval of the National Defense Council.

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