Hush-hush privatisation for Alro

The Government last Thursday quietly published its decision on the privatisation strategy for aluminium producer Alro Slatina.

However, although the above-mentioned decision was expected to clearly state the Executive’s intentions regarding the future of Alro, it provides no clarification in this regard.

The document, which was published in the Official Gazette, only says that the Government has approved the privatisation strategy, without providing any clarification, and that details are available in an addendum. However, the addendum was not made public.

“The addendum will be communicated to the relevant parties in this process,” the Government decision stipulates.

When contacted by Ziarul Financiar, Privatisation Authority (APAPS) officials would not comment on the lack of information regarding privatisation and the way the decision was published.

According to market sources, the strategy says that privatisation will be done in two stages and that documents included in the addendum will be sent to a number of investors favoured by APAPS.

During the first stage, the state’s stake in Alro (54.7 percent) will be put up for sale in a tender. In case the tender is attended only by trade company Marco International, which already owns 43% of Alro, the second stage will begin.

During the second stage, APAPS will negotiate with Marco International, which will have the right to acquire only 10% of the shares, while the state will retain its position of shareholder.

The company that will become a shareholder must initiate and participate in a share capital increase worth 50 million dollars.

The privatisation process will then continue with the publication of tender advertisements in the international press, when more information regarding privatisation is expected to surface.

Alro privatisation this year stirred fierce disputes between Romanian authorities that favoured privatisation through capital increase and WB and IMF representatives that supported the solution of a tender.

Alro is the most important link in the Romanian aluminium industry, which can turn into a $500m business in case of a merger between Alro, Alprom and BBG Tulcea.

On the other hand, Ruschii Aluminium, the world’s largest aluminium producer, last Thursday said it would have to shut down the Oradea-based alumina plant, the former Alor, if the Government continues to reject any dialogue with company representatives.

Moreover, Alor administrator Vladimir Logatchev told Ziarul Financiar that Ruschii was no longer interested in taking over the other Romanian alumina plant, BBG Alum Tulcea, currently owned by trade company Balli.

“Our group’s specialists traveled to Tulcea this spring to assess the possibility of taking over BBG. However, things are not good there either and we are not willing to get stuck with another problem,” Logatchev said.