Romania Econ Min To Focus On Selling State-Owned Pwr Cos On Stock Exch

"The Economy Ministry will equally envisage this privatization method for the rest of state-owned companies, as the privatization with strategic investors is obsolete and was not always successful," Serban also said.

Serban added the government will continue to directly involve in the companies’ activity, in their investments plans, and even try to invest in other countries as several foreign groups that invested in Romania.

The Economy Ministry is the major stockholder of some of the Romania’s largest energy companies, including the country’s largest gas producer Romgaz, thermal power producer Termoelectrica, hidropower producer Hidroelectrica, or the nuclear energy company Nuclearlectrica.

Serban said the ministry would analyze each company in its portfolio and it might sell on the bourse between 10% and 20% of their shares, to get funds for financing the companies’ projects.

But a decision to list power grid Electrica’s three branches, or Hidroelectrica would be taken only after the ministry establishes if it will continue with the national power holding setup. The former government set up a country power holding, grouping Electrica’s branches, Hidroelectrica alongside three thermal power producers in southern Romania, but the plan was aborted for the moment by the new Cabinet.

However, Serban said that a listing in 2009 is rather unlikely.

The current market conditions are not favorable for new listings on the stock exchange, but the situation will improve, Bucharest bourse’s president Stere Farmache said.

The international financial turmoil has significantly lowered foreign investors’ interest for Romanian shares, and their withdrawal has lead to a constant drop in share prices on the stock exchange. All shares listed at Bucharest closed down on the year in 2008, and the bourse’s composite index BET-C fell by more than 70% in 2008.