With no investor interested in the Post, Romanian Government goes for restructuring, debt to shares conversion, mass layoffs

The privatization of the Romanian Post threatens to become yet another Romanian privatization saga. After there were no investors interested in taking over 51 percent in the state – owned and loss making, debt – ridden Romanian Post, the state decide to first restructure it and attempt a sale next year. The restructuring deadline the state has given is six months, and then investors can submit offers until the end of June 2014. The state plans to ask for the green light from the European Commission to convert the Post's historic debt into shares, and its new tax debt, some EUR 24 million, to be paid gradually, according to Mediafax newswire, quoting a Government document. The decision to allow a longer time to pay the Post's newly calculated tax debt basically helped avoid insolvency in the beginning of June, when this tax payment was due, according to sources quoted by Romanian media. The debt to shares conversion will be part of the privatization process, so as not to be considered state aid. The conversion will not affect the ownership structure of the Post, where the state has the majority of shares, 75 percent, and investment fund Fondul Proprietatea controls the rest. The Post's total debt stays at some EUR 147 million. Another planned measure will be to lay off some 4,400 of its 32,000 employees starting July. Last year, the Post had a loss of some EUR 12 million, around a third of the loss posted the year before. editor@romania-insider.com