The government will sell on the domestic or external capital markets the remaining shares in CEC (Romanian Savings Bank) after the sale of a 69.9% stake to a strategic investor and of 5% to employees and pensioners whose last employer was this bank.
The modifications and additions brought to the CEC privatisation strategy, enacted by a governmental decision, were published in the Official Gazette at the end of last week.
The privatisation process will resume when binding bids are submitted, which should start in several weeks. Preliminary bids for the first stage of the process were submitted last autumn. In the last stage of privatisation, final improved bids will be filed.
According to the published adjustments, 9.9% of the sum raised following the sale of the majority stake to a strategic investor will be transferred to Property Fund.
The government retains the right to halt the privatisation process at any moment, “depending on national or international economic and political circumstances, the interest voiced by the potential buyers or considering other conditions that could negatively impact the outcome of the process”.
In line with the strategy, the leading two investors, whose binding bids got the highest scores, will be invited for talks related to the submitting of final binding bids. The government retains the right to invite a third investor for talks, in case the gap between this investor” bid and that of the highest bidder stands at 10% or less.
Finance minister, Sebastian Vladescu, has recently stated he expected the CEC privatisation to be finalised by yearend, counting on the expertise accumulated during a similar process carried out in the case of BCR (Romanian Commercial Bank).
Last autumn, six investors submitted initial non-binding bids: Greeks groups The National Bank of Greece and EFG Eurobank, Dexia Bank, OTP Bank, Raiffeisen Bank and Monte dei Paschi di Siena. Meanwhile, Italy”s Monte dei Paschi signalled it wanted to leave the race. BRD-SocGen, which had initially voiced its intention to participate in the process, did not submit a bid eventually. Bankers say the due-diligence process will have to be carried out again because of the significant data change, which entails several weeks” extension.
Last year the CEC was in full decline and its market share had gradually narrowed down to 4.4%. However, the bank is now being restructured and is much more aggressive on the lending segment. How high investors are going to think about the changes operated in the case of CEC is an open question. Last autumn, market sources said the best bid came from EFG Eurobank, which bid about 300 million euros.
CEC in the first quarter of this year derived net income worth almost 12.7 million RON (3.5 million euros), higher than the level reached in the whole of 2005.