Romanian Govt. partially wipes out CFR Marfa’s debts, to increase the company’s attractiveness before privatization

The Romanian Government recently approved an emergency ordinance under which the debt of the Romanian state – owned railway freight company CFR Marfa is partially wiped out, in order to increase the company’s attractiveness for privatization. By applying the ordinance, the debts that CFR Marfa has to another state - owned company, the railway company CFR SA, of some EUR 28 million (RON 127 million), will be wiped. According to the Government, this had to be passed via an emergency ordinance to meet the objectives set by agreements with the International Monetary Fund (IMF), CFR Marfa’s privatization being among the pledges Romania has made to the financial institution. Only two investors qualified for the next stage of the race to privatize CFR Marfa, in the second privatization attempt. Grup Feroviar Român GFR and the association Transferoviar Grup & Donau Finanz GMBH went into the next stage of the privatization, and OmniTRAX Inc. failed to progress, as the submission did not include the preliminary offer, nor the required comments over the sale contract. The procedure involves the sale of 51 percent in CFR Marfa and the auction starts at EUR 180 million. The privatization commission will organize a session of ‘clarifications’ with the two companies still in the race, and their final offers should be submitted by June 19, at 12:00. On June 20, the winner will be announced after opening the offers. CFR Marfa is the largest railway freight carrier in Romania, with a turnover of EUR 261 million in 2011 and a loss of EUR 22 million. Irina Popescu, irina.popescu@romania-insider.com