Romania to Sell Stake in Energy Company

Faced with a pressing need for cash, Romania's government has announced plans to sell 13.5 per cent stake in the electricity distributor Electrica Muntenia Sud, EMS, to its owner, Italy’s Enel by the end of the year.

Bucharest hopes to raise around 377 million euros from the sale.

“Part of the money obtained will be used to fund investments and the upgrades needed in the electricity sector. Furthermore, some money will also go, indirectly, to the state budget,” said Finance Minister Florin Georgescu.

The Romanian government currently holds 23.57 per cent stake in Electrica Muntenia Sud, while the investment fund Fondul Proprietatea owns 12 percent of the energy company.

Earlier this week the cabinet approved the sale, which is part of a broader government drive to sell minority and majority stakes in energy companies under the terms of a 20-billion-euros bailout loan led by the International Monetary Fund, IMF.

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

Furthermore, it is late with selling the natural gas producer Romgaz, or the stake in national carrier Tarom.

In addition, the Economy Ministry also plans to finish selling minority stakes in the utilities companies Transgaz and Transelectrica.

Electrica Muntenia Sud was acquired by Italy's Enel five years ago in a deal valued at 820 million euros.

Other major European utility companies with assets in Romania include CEZ, EON and Gaz de France.