World Bank against Marco in fight for Alro

Romanian authorities for the second time in a row postponed a decision on the indirect privatisation of aluminium producer Alro Slatina, due to pressures coming from the French metallurgic group Pechiney through the World Bank, market sources say.

The indirect privatisation of one of the best state-owned Romanian companies was to be performed by share capital increase through a 55 million-dollar cash inflow.

Following this transaction, US trade company Marco International, which currently holds a 42% stake in Alro, was supposed to become the main shareholder.

The share capital increase was scheduled to be discussed yesterday during an Extraordinary General Assembly of Shareholders (AGEA), but the Privatisation Authority, which holds 54.7% in Alro, delayed the decision for 30 days.

“I am not happy about the delay because, first of all, it harms Alro. As a member of the Management Board (CA), I know that the company needs capital inflow, while the share capital increase is the most inexpensive solution,” said Peter Braun, deputy chairman of Alro CA and representative of Marco in Romania.

The share capital increase was first proposed this May, but was postponed following pressures from the trade union and the political pressures coming from Marco’s rival for Alro takeover, Europe’s metallurgic leader Pechiney. The pressures were exerted directly, by Pechiney representatives, and indirectly, through the World Bank.

Several weeks ago, Pechiney came up with a complex proposal regarding the privatisation of the Romanian aluminium industry. The French requested to take over Alro management and the main stock in Alprom Slatina, the aluminium processor, pledging to invest 50 million dollars in three years.

Although it seemed that Pechiney lost the fight against Marco when the idea of the share capital increase was resumed, Pechiney made a comeback with the World Bank by its side.

According to market sources, the World Bank’s intervention was requested by the US financial group AIG, with which Pechiney was supposed to bid for Alro privatisation.