UK Ambassador: Romanian State-Owned Company Sale Process Far From Perfect

The privatization of Romanian state-owned companies has definitely not been a perfect process and Romania must focus on attracting more international investors, UK Ambassador to Bucharest Martin Harris said in an interview for gandul.info.

Romania must do more to make state companies attractive to international stock market investors, Harris highlighted, adding he would like to consolidate the relationship between the stock exchanges in Bucharest and London so Romania would be able to put a spotlight on the companies that may catch investors” eye.

He declined to comment on the privatization of state-owned freight railway carrier CFR Marfa, saying that the sale was an IMF requirement and the financial institution is qualified for an opinion on the matter.

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CFR Marfa”s privatization is prerequisite for the successful completion of a loan program the country signed with the IMF. Romanian private railway company Grup Feroviar Roman (GFR) has recently won an auction to privatize CFR Marfa and will pay EUR202 million for a 51% stake in the company.

Romania needs more bidders, a diversification of investors and greater international interest, Harris highlighted, adding that he believes reorganizing and not necessarily selling companies is what the state should do.

According to the ambassador, a new stand-by loan agreement between Romania and the IMF would support reform and economic growth, and would strengthen relationship with external partners.

Romania and the IMF signed a two-year EUR3.6 billion loan agreement in 2011, successor to a larger EUR13 billion deal secured in 2009. The program was initially due for completion in April this year, but the government has requested a three-month extension to meet IMF requirements.

A positive review of Romania”s program could open the way for a new agreement with the international institution, whereas a negative assessment would mean that the country”s loan program would expire de facto.