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Reza Baqir (IMF): Listing companies owned by the state would raise Romania to the status of emergent market


Listing companies owned by the state such as the Hidroelectrica would raise Romania to the status of emergent market, and the cost of lending would drop, head of the International Monetary Fund (IMF) mission in Romania Reza Baqir told a press conference on Wednesday. 

He said that the enterprises of the state (SOE) were part of their programme for some time. Moreover he stated that the progresses within the privatization process stagnated and added that it's essential for reforms in these area to be sped-up. He talked about the fast implementation of the provisions of the Law No.111/2016 regarding the corporative governance, that also refers to the boost of some IPOs that are taken into account, such as the Hidroelectrica, where the next step is the appointment in April of the Supervision Council. He added that such IPOs if successful would contribute very much to the raise of Romania as an emergent country by the investment banks, this thing having many benefits for Romania, including the cut of lending cost. 

In respect to the European funds he mentioned that an absorption of 100 percent would increase the potential GDP. 

He stated that there is a general agreement and consensus on the level of authorities and other parties involved in respect to the progresses made and to the objectives of recording progresses. According to their estimations a potential growth of Romania would gain a percentage if the European funds' absorption rate is increased up to 100 percent. 

The shareholders of the Hidroelectrica recently extended until 7 August 2017 the commitment letter with the Morgan Stanley&Co International plc and Raiffeisen Capital & Investment SA brokerage syndicate, in order to list the energy producer on the stock market. 

Earlier this year, the President of the Bucharest Stock Exchange (BVB), Lucian Anghel was explaining that listing the Hidroelectrica could upgrade Romania to emerging market status, and one effect would be the increase of pensions for 6 million Romanians. 

In 2013, the Government decided to list the company on the BVB, by increasing the capital and launching an initial public offering for the sale of newly issued shares of a package representing 15 percent of the existing share capital before the increase. 

Within this process, following an auction organized in January 2014, the the brokerage syndicate made-up of Morgan Stanley and Raiffeisen was selected, and a commitment letter was signed in February 2014. 

The Romanian state owns 80 percent of the Hidroelectrica, through the Energy Ministry, and 20 percent represent shares owned by the Fondul Proprietatea.