Romanian Government goes after state companies’ financial reserves

Romania’s Government wants state-owned companies to distribute their unused financial reserves as dividends, which would bring more money to the state budget. The Government has already asked state-controlled companies to distribute 90% of last year’s profits as dividends. Now, the Government has laid eyes on the state companies’ reserves resulted from profits that hadn’t been distributed in the previous years, reevaluation of tangible assets, and other financial operations. The Finance Ministry has drafted an emergency ordinance to modify the legislation and allow state-owned companies to distribute these reserves to their shareholders. The ministry motivated the draft ordinance saying that some companies have cash reserves which they don’t use. For example, oil pipe operator Conpet Ploiesti had more than RON 400 million (EUR 88 million) in cash and short-term investments at the end of 2016. The company is profitable and hasn’t made any big investments in years. In the last few years, Fondul Proprietatea has asked Conpet to distribute special dividends from its unused cash reserves, but the state has voted against this proposal in the General Shareholders Meeting. Last year, Conpet recorded a net profit of RON 64 million and plans to distribute RON 143.5 million worth of dividends from this profit and from other reserves, according to a board decision. Other state-owned companies in the energy sector are in the same situation. Romanian gas producer Romgaz could distribute 93.6% of its profit as dividends Romanian state takes RON 300 mln dividends from Transgaz editor@romania-insider.com