Electrica Oltenia, the biggest privatisation in recent years

The largest privatisation in recent years, in the wake of
which CEZ Czech group gets to control the former Electrica Oltenia,
is nearing completion, after Fondul Proprietatea (Property Fund)
got 230m euros for almost one third of CEZ Distributie and CEZ
Vanzare units on Monday.
CEZ group, owned by the Czech state, has thus come to control
81% in the former Electrica Oltenia. To gain the full control over
the company, the group is due to pay another 145m euros to
Electrica by October 2. Thus, the deal by which CEZ acquires the
capital that was not privatised in 2005 amounts to 375m
euros.
Unlike the rest of privatisations, negotiations between CEZ
and Fondul Proprietatea did not last more than three months, being
carried out quietly, in the context where president Traian Basescu
last year recommended privatisations take place through the stock
exchange for higher transparency.
CEZ in April 2005 paid 166.5m euros to acquire 51% in the
capital of former Electrica Oltenia, with Fondul Proprietatea being
set up eight months later and taking over a 30% stake from the
state.
The biggest privatisation of recent years is going to bring
over 300m euros into the state’s accounts directly or indirectly,
considering Electrica is controlled by the Economy Ministry and the
Finance Ministry owns 66% in Fondul Proprietatea.
Fondul Proprietatea gained almost 130m euros, given that
stakes in CEZ Vanzare and CEZ Distributie had been booked at a
historic cost of 100.8m euros. The fund’s liquidity, in form of
banking deposits and government bonds, thus climbed to almost 500m
euros, with the fund becoming one of the wealthiest companies of
Romania.
“This is the first major deal in Fondul Proprietatea’s
portfolio. We consider the price we got is very good, taking into
account both the market value given by an independent assessor and
the current conditions on the capital market,” says Daniela
Lulache, general manager of Fondul Proprietatea.
Lulache together with Mihai Darie, the financial manager, were
the persons of the Fund’s management who were involved in the deal.
CEZ worked with Tuca, Zbarcea si Asociatii law firm, while
Popovici, Nitu si Asociatii law firm assisted the Fund.