The State Ownership Fund will have to annul the privatisation contract of Petrotub Roman, after the Competition Council (CC) negatively rated the acquisition by the British company Tubman International of 70 percent in its stock, Gheorghe Oprescu, vice-president of the Council told Ziarul Financiar.
The motivation brought by the Council for the negative rating was the monopoly position Tubman would hold on the Romanian tube market. The British company is a majority shareholder in Petrotub, as well as Laminorul Braila and Silcotub Zalau, practically the most important players in this field on the Romanian market.
“The appearance of a large monopolist concentration is involved. Tubman was to hold 74-75 percent of the tube retail market,” Oprescu says. He says that the decision of the Council can be contested by Tubman International and in case it should stay the same, the stake of 70 percent re-enters the portfolio of the State Ownership Fund, which will be able to resume the privatisation of Petrotub SA.
British holding Tubman International is one of the world leaders as regards tube production, having turnover standing at three billion dollars annually. Tubman buys and annually delivers 15 million tonnes of steel, has credit lines opened with 40 international banks and has over 40 companies within its network, through which it sells tube and profiles products.
Petrotub Roman, a company specialised in producing and selling welded steel tubes, has a number of 3,746 employees at present. The company’s debts to the budget amount to 373 billion lei, and another 180 billion lei represent payment delay penalties. The company’s tube output on the first quarter of this year reached only 18,000 tonnes, as compared to 40,000 tonnes registered during the same period of year 1999. Petrotub trade union has never accepted the presence of the new investor that planned to lay off almost 1,500 employees. Moreover, the scandal at Roman took on political connotations that culminated in the intervention of former Premier Radu Vasile, who asked the British investor to give up layoffs. As a response, David Gray, executive manager of Tubman International, stated that personnel restructuring depends on the efficiency level it would start from after taking over the company.