Sidex - the last communist loss-making giant finally privatised

Starting with “We are NOT selling our country,” a tag attached to the Party of Social Democracy (PDSR) while in power for years and to the “expression of the privatisation wish”, the road the party now run by Adrian Nastase has travelled has been much longer than most would ever think possible.

“No more accusations about us being against privatisation and reform!” These are the first words of the Prime Minister’s speech delivered soon after the signing of the contract for the privatisation of the Sidex Galati.

The ceremony took place after several months of negotiations between the technical teams, which went as far as to work out details about the pollution limits in the area surrounding the plant over the next few years.

And finally, the documents were signed by Lakhsmi N. Mittal, chairman and chief executive officer of the British-Indian LNM Group and Privatisation Minister Ovidiu Musetescu yesterday.

This is the conclusion of a ten year period during which Sidex accumulated 900 million dollars in losses and was the target of the policy embraced by every single political force to have come in power over the past ten years: the theft.

Being a player on a market that has become more and more hostile over the past few years – the steel price is now at one of its all time lows, as well as “blessed” with poor management and double standards for those leeching it, Sidex has now come to generate 80 percent of the losses registered by the Romanian companies.

Under the circumstances, what can we say about a sale price of 10 cents a share, that is 52 or 54 million dollars for the entire plant?

“History will not judge us by the price, it will judge how the company (i.e. Sidex) will look like in the future,” Minister Musetescu said upon the signing of the privatisation contract.

The exact price of the transaction is yet undisclosed because the number of shares to be held by the Privatisation Authority following the conversion of the debts into shares is still unknown.

“We estimated that the Privatisation Authority will finally come to hold more than 90 percent, which will be sold to LNM,” Musetescu specified.

Apart from the money paid for the shares, LNM pledged by the contract to invest “at least” 351.1 million dollars over the next ten years, to provide 100 million dollars in working capital and not to resort to collective layoffs over the next five years.