Romania has approved the sale of a 20 percent stake in state-owned airline company Tarom, in accordance to the agreement signed with the IMF, European Commission and World Bank.
Under the EUR 5 billion precautionary agreement, Romania pledged to reform its state-owned enterprises in energy and transportation, by paying arrears, privatizing the management and removing non-viable assets. The viable assets in these companies will be privatized.
A 20 percent stake of Tarom will be sold through a secondary IPO via the Bucharest Stock Exchange (BVB). The moment will be decided by the Government.
The letter of intent agreed by the Romanian Government with the IMF stipulates that Tarom should eliminate all arrears by end-June, take cost reducing measures and increase revenue. Also, a private management team is expected to settle in by end-January 2012.
In July, Romania failed to sell a 9.8 percent stake in gas and oil producer Petrom, as the subscription rate for the offer was positioned below the 80 percent threshold.