Home Page
 
News 29 Dec 11

Romanian State Companies to Donate 85% of Profit

In a controversial move, the Romanian government has ordered state companies to transfer most of their 2012 profits to the state budget.

Marian Chiriac
BIRN
Bucharest

The cash-strapped government has decided that state-run companies must transfer 85 per cent of their profits to the state budget next year. The move is opposed by most potential investors.

A similar provision was ordered in 2011.

The government has approved a memorandum that will lower the percentage of state-owned firms' profit that must be transferred to the state budget from the current 90 per cent, according to media reports.

Analysts say the move is against the government's stated policy which aims to attract foreign investments in order to reform the country’s state companies.

“The government is taking a serious risk with foreign investors if it goes ahead with this measure, as such decisions could cause investors to lose confidence in the Romanian government’s willingness to honor its bond and debt obligations,” says economic analyst Ilie Sorbanescu.

Franklin Templeton Investments, the US-based manager of investment fund Fondul Proprietatea, went to court earlier this year against the shareholders of state-run gas company Romgaz. The company had approved a €94 million donation to the Romanian state from the company’s profits.

The state is the majority shareholder of Romgaz, while Fondul Proprietatea owns 15 per cent of the company.

Shareholders approved the donation despite public opposition from Templeton.

Romania has a growing need for cash, and is largely dependent on foreign investment to fill holes in its state budget.

The government plans to sell minority stakes in energy, transportation and chemical companies next year as part of a larger plan to raise money under the terms of a €20 billion International Monetary Fund, IMF, bailout loan.

Talk about it!

blog comments powered by Disqus

Related Headlines:

bosnians-celebrate-birthday-of-leader-they-never-knew-05-26-2017
26 May 17

Bosnians Celebrate Birthday of Leader They Never Knew

Bad weather did not stop a whole lot of young Bosnians from partying on May 25 in honour of the birthday of Yugoslav leader Josip Tito – who died long before most of them were born.

26 May 17

Balkan States Struggle to Meet NATO Benchmark

Premium Selection

bosnians-celebrate-birthday-of-leader-they-never-knew-05-26-2017
26 May 17

Bosnians Celebrate Birthday of Leader They Never Knew

Bad weather did not stop a whole lot of young Bosnians from partying on May 25 in honour of the birthday of Yugoslav leader Josip Tito – who died long before most of them were born.

ziadin-sela-outlines-vision-for-a-new-macedonia-05-26-2017
26 May 17

Ziadin Sela Outlines Vision for a New Macedonia

Macedonian ethnic Albanian leader recalls the night he was almost killed in parliament – and says Albanians expect tangible results from their support for Zoran Zaev - starting with justice reform.

26 May 17

Balkan States Struggle to Meet NATO Benchmark

25 May 17

Why Serbian Presidents Rule like Milosevic

24 May 17

Who is Who in the Kosovo Elections

Latest News from the Balkans

26 May 17

Small Town in Serbia Appeals For More Migrants