Romania To Sell More Than 10% In Nuclearelectrica, Hidroelectrica

Jeffrey Franks, head of the IMF mission in Romania, said the fund and the Romanian authorities haven't defined an exact stake to be sold in the two companies.

"In the case of Hidroelectrica and Nuclearelectrica we agreed that we will look at the exact percentage later, but I think the word significant in this case is certainly less than 50%, because they (the Romanian government) don't want to sell the majority stake and I think it has to be somewhere more than 10%," Franks said.

He said the decision to sell minority stakes in Nuclearelectrica and Hidroelectrica was made after the plan to create two energy champions was blocked.

Romanian authorities intended to group almost all state-owned power producers in two energy champions, but the plan was severely delayed by legal action.

In the last letter of intent sent to the IMF, Romania agreed it needed to have a "plan B" in case the champion strategy was blocked.

"They (the local authorities) needed to move ahead with the plan B at the same time so they didn't lose the necessary time for additional investment," Franks said.

"What we have seen over the last months was that the plan A, their champions plan, is blocked so they agreed to move ahead with plan B and part of the aspects of plan B is that they now agreed they will privatize minority stakes in Hidroelectrica and Nuclearelectrica," he added.

The plan B also includes grouping of companies, but at a smaller level than the national champions.

Nuclearelectrica is the operator of Romania's sole nuclear power plant, which ensures about 20% of the country's electricity consumption. Hidroelectrica is the country's largest energy producer, owning hydropower plants with a total installed capacity of 6,400 MW, which provided almost a third of Romania's electricity production in 2010.

In the agreement with the IMF, Romania has also pledged to sell minority stakes in other energy companies, such as OMV Petrom (SNP.RO), Transelectrica (TEL.RO), Transgaz (TGN.RO) and Romgaz.

When asked how much money the government might obtain from selling part of its participations, Franks said the amount could be in "the billions of euros," if the government goes ahead with the plans it has currently presented.

Joint teams from the IMF, the EU and the World Bank ended Monday the first review of a EUR5 billion precautionary loan agreement, successor to a larger EUR20 billion bailout package that ended in April this year.

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