Privatisation of Posta Romana fails again

By bne IntelliNews September 16, 2015

Iulian Ernst -

 
The sole prospective bidder for Romania’s national postal services company Posta Romana – bpost of Belgium –  failed to submit a binding bid by the September 15 deadline, in another blow to the country's privatisation programme.
 
The Ministry of Information Society will now draft a memorandum of the company’s current situation and the government will decide next week on further steps to be taken for increasing the company’s capital.
 
bpost had been the only bidder for the company, despite reports last year in the local media that several other companies including Britain's Royal Mail, France's La Poste and postal operators from Holland and Poland had expressed an interest prior to the September 30 2014 deadline. 
 
The president of the managing board at Posta Romana, Dan Stein, told Bursa daily that the company should have an IPO, but only after further streamlining its activity, when its value might be five times higher than now. The company is in a much better situation and can finance itself before the IPO, because of the good financial results last year and in the first half of this year, he explained.
 
Posta Romana is 75% owned by the Romanian state, through the ministry of informational society. The restitution fund Fondul Proprietatea owns the remaining 25%. The state had put up for sale a 51% stake.
 
The value of the company has increased visibly since last year, when bpost submitted its non-binding offer, but the investor was not ready to revise upwards its offer, minister Dan Grindeanu explained. The non-binding offer was visibly below the company’s current value, he told hotnews.ro.
 
The company reported a full-year €5mn profit in 2014, after four straight years of losses. It expects to remain in profit this year, with a €12.3mn investment programme already under way.
 
Posta Romana owns Romania's main postal distribution network and more than 5,600 post offices across the country. Although around 12% of the workforce was laid off during the restructuring, the company remains Romania's largest employer.
 
Another issue during the privatisation process was that the prospective bidder asked the government to settle any possible state-aid issues generated by past operations at Posta Romana, but this was not possible yet.
 
Romania is in process of sending to the European Commission information required to formally confirm the company hasn't received state aid in the past, the company said at the end of May. Such a confirmation is required by the investor to avoid penalties after the privatisation goes ahead, which would alter the financial performance of the company.
 
The company and the national antitrust body Consiliul Concurentei have prepared the necessary documents, the ministry said in its September 15 press release, implying that the final conclusions of the European Commission were not available by the privatisation deadline.
 
This is the second failed privatisation attempt at Posta Romana. The first attempt failed in 2013 because of a lack of interest and unresolved debt issues. 
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