Romanian Govt Approves National Pwr Holding Setup

"The company groups nearly 50% of the power production and three power distributors still not privatized. The new company will be called «Electrica», and will have a total capacity of 10,000 megawatts," Prime Minister Calin Popescu Tariceanu said.

Tariceanu said that the Romanian energy system is too divided for the moment and it is unable to resist competition and abide by European environment norms.

Tariceanu said the new company would double the power volumes traded on the free market, and will become the second-largest energy company after oil company Petrom and one of the top 25 in Central and Eastern Europe.

"I wish this company to become one of the economy’s champions, an engine for the economic growth,” Tariceanu said.

The Prime Minister added the company would be listed on the Bucharest Stock Exchange but did not give a time reference.

The new company will include power producer Hidroelectrica, state-owned power grid Electrica and thermal power producers Turceni and Rovinari.

According to the emergency ordinance draft, AVAS will take over from Romanian Ministry of Economy and Finance a number of 361.98 million shares in power producer Hidroelectrica, worth RON10 each.

Following the transfer, the share capital of state-owned power grid Electrica will be hiked through AVAS’ in kind contribution, with the stakes in Hidroelectrica and thermal power producers Turceni and Rovinari.

Electrica will issue new shares to be given to AVAS. The privatization authority is the majority shareholder of Electrica and of the two thermal power producers.

Authorities said the power holding will be worth between EUR20 billion and EUR24 billion.