Lionachescu, Capital Partners: Investors completely distrust Romania and Bulgaria

Doru Lionachescu, managing partner of one of the biggest M&A and financing advisory firms on the local market, Capital Partners, says the sentiment among investors is complete distrust in Romania and Bulgaria, and even though the deals are good, what is more important for them is the macroeconomic climate.

“The perception is that America is out of the crisis and is slowly heading towards economic growth. There is a clear differentiation on emerging markets, in that investors are betting on Asia en-masse, on India and China to be precise. This is where they see the future. And they won’t even hear about Eastern Europe when it comes to emerging markets. They differentiate Poland and Czech Republic a bit, but when it comes to Romania and Bulgaria, they see them as doomed. The exact same sentiment as in 1999-2001. We have reverted to the way they saw us back then,” Lionachescu told ZF. The consultancy firm currently has six ongoing mandates to sell and only one to buy, but the greater demand comes for actual financing or financial restructuring. “Everyone wants to sell, but there are no buyers. If they are reasonable, they can get a price. The problem is how long it takes. You may end up with a buyer that demands a change of terms or half the price at the last minute,” the investment banker explains. There have also been three or four cases since last October, when he advised his clients not to go any further because the terms were bad. As for financing, the companies are looking abroad for higher amounts of money and going to local banks for lower amounts. Demand for financial restructuring has also increased lately, coming in part from financial institutions, and in part from clients. The financing segment has kept Capital Partners’ business to last year’s level, in the first five months of the year. “2009 is not a bad year for us, but that does not prevent me from seeing the disaster around,” Lionachescu says.