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Books on Romania
REPUBLICAN REFERENCE
Area (sq.km)
237,500
Population
22,271,839
Capital
Bucharest
Currency
Leu
President
Ion Iliescu
Private sector
% of GDP
40%
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Update No: 091 - (26/11/04)
Governing Party Considering Deal with Nationalists
Top officials from Romania's governing party have said that they would consider
a political agreement with the main nationalist party, depending on results from
closely contested elections. The Social Democratic Party did not rule out
"a specific agreement with the Greater Romania Party" after the Nov.
28 elections, executive secretary Octav Cosmanca said, according to daily
Evenimentul Zilei.
The remarks were the first suggesting the Social Democrats could team up with
the nationalist party, branded by some Western diplomats as "extremist.
"The U.S. Embassy in Bucharest in October warned it would end relations
with the National Trade Union Bloc after it forged an alliance with Greater
Romania.
The governing party, which has been accused of arrogance and corruption, ran a
tight race with the centrist Justice and Truth Alliance ahead of the
parliamentary and presidential elections. Greater Romania came in third.
Social Democratic deputy leader Miron Mitrea also said the party was considering
some kind of partnership with the Greater Romania, according to the daily
Jurnalul National.
"I think that in politics any solution is viable, possible…. Only a
politician who is not realistic can say he does not take into account a party
which has more than 20 percent," he was quoted as saying.
Greater Romania leader Corneliu Vadim Tudor is in third place for the
presidential elections. The party beforehand had about 25 percent of seats in
484-seat Parliament.
Presidential elections
Prime Minister Adrian Nastase, chairman of the governing party, was always
leading the presidential race, followed by Bucharest Mayor Traian Basescu, who
heads Justice and Truth Alliance.
Nastase said that he had been waiting for election results before making any
partnership decisions.
In campaign stops, Basescu criticized the government for rushing to close
accession negotiations with the European Union, saying that the terms don't
protect Romania's interests.
The government rejected his claims, saying that it was in Romania's interest to
close the negotiations before the end of the year, in order to sign the
accession treaty with the EU in 2005.
Romania is scheduled to join the EU in 2007, alongside Bulgaria.
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ENERGY
E.ON, CEZ file final bids for Romanian power sellers
Czech utility CEZ and German power group E.ON are finalists in the race for the
privatisations of Electrica Moldova and Electrica Oltenia, regional energy
distributors. Out of the five companies which expressed their interest in the
takeover of the two electricity companies only two submitted bids by the
deadline set by the economy ministry, New Europe reported.
E.ON AG, Europe's second largest electricity utility, and CEZ AS, the Czech
Republic's biggest power company, filed final bids for majority stakes in two
Romanian power distributors, Dorin Mucea, the head of the economy ministry's
privatisation department, said recently. Final offers were made for state-owned
Electrica Moldova SA and Electrica Oltenia SA, two of Romania's eight regional
power distributors.
The government is offering a 24.62 per cent stake in Electrica Oltenia and
Electrica Moldova, with the new owner required to gain a majority stake through
a share capital increase. The two companies supply electricity to the
southwestern and northeastern parts of the Romania country, respectively.
Electrica Olentia has 1.36m customers and sells 6.8m MWh a year, and Electrica
Moldova has 1.3m customers and sells 4.1m MWh a year. The two bidders submitted
offers for both suppliers, Mucea said.
Romanian authorities will start negotiations with the two bidders to select the
winner for each supplier, he added. Spain's Union Fenosa SA, another company
that was initially in the group of bidders, did not bid, according to Mucea. AES
Corp of the US was also considering bidding for two power suppliers, although
Romanian authorities said the company was not shortlisted.
AES spokeswoman, Robin Pence, said recently the company was interested in
bidding only if Romanian authorities accepted its request to extend the
deadline, according to Dow Jones. The final deadline had already been delayed by
two weeks at the request of companies who said they needed more time to prepare
their offers. The amounts of the bids were not announced.
"We hope to complete the sale" of the two companies "before the
end of the year," Mucea said at a press conference in Bucharest. When asked
about the chances of CEZ, he said: "Although state-owned, it is competitive
and has very modern and good management." Mucea said CEZ and E.OM filed
bids for both power distributors. Theodor Reumschuessel, a spokesman for E.ON
Energie AG, the unit responsible for Eastern Europe, declined to comment.
"Our interest in Romanian distribution companies is another logical step in
the region of southeastern Europe," CEZ said in a statement.
Oltenia has about 1.4m customers and sells about 6.8 terrawatt hours of power,
CEZ said. CEZ, which earlier this year bought three power distribution companies
in Bulgaria, has 3.4m customers in the Czech Republic and another 1.9m customers
outside the country. Romania is selling its energy assets to open its power
market before it joins the European Union. The nation expects to join the
25-member bloc in 2007.
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FOREIGN LOANS
Cable Systems clinches US$70 loan from ING Bank
Romania Cable Systems (RCS) received a US$70m loan from ING Bank Romania,
ING Bank deputy general manager Misu Negritoiu said. The funds will be used to
finance acquisitions, increase working capital and boost future equity. Apart
from the Romanian branch the loan operation also includes ING Bank NV Amsterdam
and The Royal Bank of Scotland, New Europe reported recently. RCS is one of the
most important telecommunications operators in Romania. Services for
transmission of data, Internet, cable TV and fixed telephony are provided by
Romania Data Systems (RDS), through RCS infrastructure.
Over the past 5 years, the company has invested more than US$100m. It has
operations in Hungary and Slovakia too. The RCS main shareholders are Austrian
investment fund EPIC and US-based Quadrant. It reported a 2003 turnover of
US$80m.
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TELECOMMUNICATIONS
Telemobil to raise over US$273m
Shareholders of Telemobil, the operator of Zapp network, approved in late
September the increase of the company's share capital by 9,262.4bn lei (about
US$273m), through contributions in kind by shareholders or through conversion of
the various shareholder loans granted to the company, New Europe reported.
The operation will be accompanied by an issue of more than 370m shares with a
face value of 25,0000 lei/share. Shareholders may opt for full payment on the
date of subscription or for paying 30 per cent at that moment and the rest over
a three-year period from publication in the Official Gazette on October 13th.
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