Last Chance For Romtelecom's Listing

05.26.2011 ZF English

The sale of Romtelecom shares held by the Romanian state to Greek group OTE without listing a stake on the Stock Exchange would be a "huge error", considering that the privatization contract signed in 2003 provides for it, says Dan Nica, vice-president of social-democratic opposition party PSD, and former communications minister.

"It is the Government's decision whether it wants to conclude a transaction with OTE or list a stake. It would be a huge error not to float Romtelecom," says NIca, who was communications minister in 2003, when Greek group OTE became the majority shareholder of the formerly national landline company.

"There are still expectations on the market that the state will list its stake in Romtelecom. This is the last opportunity to attract big companies to the Stock Exchange because if another sales method is chosen, there are slim chances to see the company listed.

A company the size of Romtelecom is not born every day. The company represents an important sector for investors, a sector that is currently lacking from the Romanian capital market," said in turn Stere Farmache, president of the Bucharest Stock Exchange.

Dan Nica says the statements made by the current management team of the Communications Ministry, according to which OTE has a pre-emption right over the shares, which prevents the listing from going ahead, are not right.

"It's not true that the state may not list Romtelecom shares because of the privatization contract signed in 2003. Moreover, the Romanian state was required to list the shares, there was a deadline, which was exceeded. In the privatization contract there are two restrictions on the sale of shares that have to do with unfair competition: the shares may not be sold to a rival," Nica said.

Both minister Valerian Vreme and secretary of state Marius Fecioru have said over the last few months that a prospective listing is blocked by the pre-emption right won by OTE in 2003.

"We did not go directly to the stock exchange because of a provision in the privatization contract signed by the Adrian Nastase Cabinet in 2003," Fecioru recently said.

Representatives of the Communications Ministry, which manages the shares held by the state in Romtelecom, have said on several occasions they preferred a listing - "the most transparent sales method," but did not take concrete steps towards this, saying everything was frozen in place until an answer came from Athens.

The Romanian state notified OTE at the end of last year that it wanted to sell the 46% stake in Romtelecom, and has been expecting an answer on whether the Greek group wants to buy into the company or has another proposal. A written answer from Athens is expected by the end of this week.