Romania May Cut Its Stake in Hidroelectrica to 51% if Energy Sector Overhaul Fails

BUCHAREST (Romania), February 22 (SeeNews) – Romania could cut its stake in hydro power producer Hidroelectrica to 51% in case the planned overhaul of the state-owned energy producers into two megastructures fails this year, local media reported on Tuesday.

Romania’s Economy Ministry holds 80% of Hidroelectrica and the country’s property restitution fund Fondul Proprietatea owns the remaining, news portal Hotnews.ro said.

Starting with 2012, the state may sell on the bourse stakes of 10%-15% at a time until its holding in Hidroelectrica diminishes to minimum 51%, Hotnews.ro quoted Hidroelectrica’s director Constantin Trihenea as saying.

"This process is planned for a longer period of time because the bourse listing could not take place earlier than 2012-2013, in the current situation, and the first package would be worth 10%-15%," Trihenea said.

Romania plans to merge some of the assets operated by Hidroelectrica, three thermal power stations as well as brown coal mining assets into one entity called Hidroenergetica. Three thermal power generation complexes, some coal-mining and Hidroelectrica assets and nuclear power plant operator Nuclearelectrica would be pooled into a second holding company called Electra.

US-based Franklin Templeton Investments, the manager of Fondul Proprietatea, filed in November a court action against the Romanian government's plan to set up the two energy megastructures, citing the lack of a coherent privatisation and restructuring strategy. The Romanian government is also coming under pressure from trade unions, who are suing it over plans they claim would merge unprofitable assets with money-making enterprises.

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