BVB investors: State must fight to list Romtelecom

The floatation of the shares held by the Romanian state in Romtelecom, a business that could bring EUR1 billion to the Bucharest Stock Exchange (BVB) is blocked by the provisions of the privatization contract, whereby Greek group OTE became the majority shareholder of the biggest landline telephone operator in 2003, says Marius Fecioru, secretary of state in the Communications Ministry (MCSI).

“We did not go directly to the stock exchange because of a provision in the privatization contract signed in 2003 by the Adrian Năstase cabinet,” says Fecioru, who specifies that in the absence of an answer from Athens, the sale process is frozen. “The Greek group has a pre-emption right. We’d still prefer a listing, it remains the most transparent sale procedure,” Fecioru adds.

“It only counts what the government does, not what it says. The state shows it has no interest to float its shares,” says Dumitru Beze, president of the Association of Capital Market Investors. “There is a 2005 law according to which the state has to float all its Fondul Proprietatea (Property Fund – FP.RO) interests, but it is doing everything it can to delay procedures in order to shield the political clique that has contracts with these companies. If the companies were listed, these contracts would become public and they would no longer be able to exist,” says Beze. If all the state’s shares had been listed in 2005, Romania would have looked different now.”

The Romanian state announced at the end of last year it wanted to sell its 46% stake in Romtelecom, in a deal estimated by Communications Ministry officials at EUR1 billion, but cannot turn to the Stock Exchange because OTE has yet to give an answer as to whether it wants to buy the shares of the Romanian state or would prefer floatation, too.