News 20 Nov 12

Romania Cancels Selling Stake in Energy Firm

Poor market conditions force Bucharest to change plans to sell a minority stake in the Transgaz gas company

Marian Chiriac

Romania is to cancel plans to sell a 15-per-cent stake in the gas pipeline operator, Transgaz, as agreed with the International Monetary Fund, citing poor conditions on the stock market.

“The stock market is down. In such conditions, Romania has no interest in carrying out a listing just for the sake of it,” Economy Minister Daniel Chitoiu told the website Hotnews.

Chitoiu said Romania will instead invest in the country’s natural-gas grid and other projects, such as the Nabucco gas pipeline.

Faced with a need for cash, Romania announced early this year that it would sell a minority stake in Transgaz by October, but soon changed the deadline till the end of this year.

The sale is part of a broader government drive to sell minority and majority stakes in energy companies under the terms of a 20-billion-euro bailout loan led by the IMF.

The Economy Ministry also plans to finish selling minority stakes in the utility company Transelectrica.

Romania is largely dependent on foreign borrowing to finance its investment plans. Last year it failed to sell a minority stake in the oil company, Petrom, on the stock exchange.

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