The Romanian state begins steps to sell its stake in Romtelecom

The Romanian state will hire a specialized consultant to sell the full 45.99 percent minority stake that it still owns in telecom operator Romtelecom, announced the Ministry for Information Society.

Currently, the government’s main option would be that the shares are listed and sold on the Bucharest Stock Exchange. However, the government is waiting for the opinion of the consultant on the matter, so that the state’s profit will be as high as possible.

“During the Wednesday session, the government approved the decision to modify and complete the HG 727/2005 regarding some measures for finalizing the Romtelecom privatization, which was preceded by the approval of a memorandum on the same topic. The decision stipulates the restart of the completion of the Romtelecom privatization process by selling the minority share package which the state, via the ministry, owns in the company. These shares have a nominal value of RON 10 each, which is the equivalent of RON 146,460,920, representing in total 45.99 percent of Romtelecom’s social capital,” according to the press release from the Ministry for Information Society, states Mediafax newswire.

According to the government decision, a specialized consultant- an investment bank or a consortium made up of an investment bank and a legal consultant- must be employed.

The consultant should have the ability to offer financial investment services on the capital market, with a view to finalizing the Romtelecom privatization.

The role of the consultant will be to offer specialized assistance, including legal assistance, throughout the privatization process, to draft all the documents and carry out all the necessary processes, to draft the privatization strategy and propose the privatization method.

The privatization expenses, which include the fees of the consultant and the preparation of the process, will be financed from the state budget which should be approved by the ministry.

The Ministry will set up a committee that will organize the selection process, evaluate the offers of the consultants and select the consultant.

“The completion of the privatization process is considered adequate in the current economic context and given the profitability of the company that in 2012 saw a RON 312,633,865 profit for a turnover of RON 2,728,800,306. At the same time, according to the stand-by precautionary loan agreement signed with the IMF, the privatization is among the measures elaborated through structural measures meant to insure economic growth. It is believed that increased confidence among investors, together with the planned privatizations in the program, will bring new foreign direct investments and banking capital entries,” goes the press release.