APAPS sells whatever it can

Two million dollars. That is all APAPS (Privatisation Authority) got for Nitramonia Fagaras and Mefin Sinaia, two companies whose last year turnovers were jointly worth more than $33 million, but whose debts amounted to $28 million. This is the risk of procrastinating privatisation – one gets to practically give shares away. And these are the fortunate cases of successful, completed privatisation!
When a company starts generating negative cash flow, shareholders try to turn it around and, if they fail to do so, they either sell it or close it down. What is there to do if one cannot sell a loss-making debt-accumulating company for several years? This is precisely what APAPS is experiencing right now, as it manages to get less and less money for the companies it has to privatise.
APAPS at the end of last week succeeded in selling Mefin Sinaia and Nitramonia Fagaras, two companies that fit into the extra large category, as both of them are currently employing more than 1,000 people. The buyers were two American companies.
DCI Walbridge Partners Ltd. bought 72.1% in Mefin Sinaia, that is the stake held by APAPS, under a $3.27 million deal. APAPS got only $1.35 million for it, with the buyer pledging to make nearly $2 million in investments.
DCI Walbridge is part of the Walbridge Aldinger Detroit Group, one of the leading automotive companies in the world.
The second large company privatised last week was Nitramonia Fagaras. US-based Fletcher Group LLC bought the Nitramonia stake held by APAPS for $21.34 million. This is the second Romanian company in which the Americans at Fletcher buy the controlling interests, after the heliographic paper and dye maker Colorom Codlea last year.
Fletcher actually paid $807,000 for the 79.05% in Nitramonia, but pledged to invest more than $20 million, $7 million of which for environment protection purposes.