AVAS intends to privatise in 2006 the 62 companies in which it is major shareholder

BUCHAREST – The Authority for State Asset Resolution (AVAS) will launch privatisation procedures this year in the 62 companies in its portfolio in which the State is a major stockholder.

Of the 62 companies, 27 were taken over from the Office for State Shareholding and Privatisation in Industry (OPSPI). AVAS President Teodor Atanasiu stated yesterday that the institution plans to cash EUR 600 M from these privatisation procedures. According to Atanasiu, the AVAS budget estimated for 2007 is EUR 1 bln, of which 60 per cent from privatisation.

Out of the 62 companies, stock sale procedures have already been launched in nine entities, while another 26 will be put in the market by Q3, 2007. The most important companies transferred from OPSPI to be privatised this year are the Turceni, Rovinari and Craiova power complexes and Electrica Muntenia Nord, Electrica Transilvania Nord, Electrica Transilvania Sud and Electrica Muntenia Sud.

As for the debt execution procedures, AVAS intends to carry on debt recovery operations in 2007, to organise approx. 600 auctions and reduce the number of debtors by approx. 20,000 companies. Atanasiu also added that by August 1 the institution would sell in the capital market the minor stakes held in the institutions in its portfolio listed with the Stock Exchange.

Justice Ministry turns down AVAS bill to modify privatisation act

The Ministry of Justice rejected the bill drawn up by AVAS with a view to modifying the privatisation legislation, Atanasiu announced. The draft emergency ordinance allowed companies that cannot be privatised to be exempted from Bankruptcy Act provisions for six months, so as to avoid the sale of assets for real estate purposes. “The draft ordinance was sent to ministries, but it got stuck at the Ministry of Justice,” Atanasiu explained. He added that unless a viable solution is identified for these companies, AVAS would not be able to privatise even the viable plants or production lines.

The bill stipulated the sale of functioning plants, but also modifications which would facilitate investors’ involvement, through elimination of certain privatisation barriers such as the compulsory technology investments or the obligation to keep a particular number of employees or a particular activity.

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