Winner selection, not final transaction for Romania's CFR Marfa needed for country to pass the upcoming IMF review

With the International Monetary Fund (IMF) set to analyze whether Romania has complied with the preconditions to successfully end the existing financial agreement on June 26, the country is pushing to tick the remaining boxes. In case of a negative evaluation in the IMF board, the agreement will expire de facto, according to Governmental sources quoted by Mediafax. While some media recently said the country has missed half of its pledges, the Prime Minister Victor Ponta said the country has not asked for any waiver from June onwards. The country had previously asked for a delay in fulfilling its conditions from March to May. Meanwhile, the Minister Delegate for the Budget Liviu Voinea said Romania did not miss any of the five targets set by the IMF. The first was the privatization of 15 percent in Transgaz, which happened in April, the second, choosing a consultant for the sale of 15 percent in Complexul Energetic Oltenia, which was done in May. The IMF also asked for a drop in local and central Government arrears to RON 300 million, and to RON 20 million respectively, but the numbers are yet unknown as of end of May, and should be made public next week. The firth condition was selecting a winner in the privatization of CFR Marfa, which has June 21 as deadline. So none of the targets were missed, according to Voinea. The CFR Marfa privatization will not have to finalized for Romania to pass the last point in the IMF pledges list, which only requires the presentation of a bid winner. 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. 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. editor@romania-insider.com