Until December 31, 2027, the alienation of shares held by the state in national companies and societies, in credit institutions, as well as in any other company in which the state is a shareholder, regardless of the share capital held, will be prohibited or suspended, according to the project initiated by the Social Democratic Party (PSD) amended by the far-right AUR, and adopted by Parliament, through the final vote of the deputies on May 27. The text passed by the deputies sweetens the initial provision, allowing participation of private investors in capital increases by issuance of new shares, and excepting loss-making companies from the scope of the bill.

The law was criticised by centre-right bloc PNL-USR for interfering with Romania’s commitments under RRF and PNRR, for the restructuring of state-owned enterprises (SOEs).

The bill had been adopted by senators on May 4. In the Senate, PSD and AUR voted for the project, while the Liberal Party (PNL) and reformist USR voted against it, and the Hungarian party UDMR abstained. Now, before the vote given in the Chamber of Deputies, amendments initiated by AUR were slightly corrected and backed by, among others, MPs of UDMR, SOS Romania, and the national minority, according to Profit.ro.

According to these amendments, companies, societies, and credit institutions that record losses for a period of five consecutive years, or for which insolvency proceedings have been opened by final court decision, will be exempted, as well as for shares whose total value, on December 31 of the previous fiscal year, does not exceed RON 5 million for each company, society, or credit institution.

Also, according to the amendments to the project, the increase in share capital through the issuance of new shares and the issuance of bonds convertible into shares will be allowed, provided that state control over these companies is maintained.

Former minister of energy Bogdan Ivan (PSD) has defended the law as “extremely important” because it protects the Romanian state's participation in strategic companies, especially in energy, Agerpres reported. He stressed that the listing of state companies [by the issue of new shares] is not banned, but the sale of shares in profitable companies such as Romgaz, Hidroelectrica, or Electrica (already listed) is prohibited. 

“I want to be very clear, we are talking about companies that are profitable, we are talking about a principle in which the listing of companies with a majority state participation on the stock exchange is not blocked, which is an extremely good thing, but  [the bill] rather bans the sale of shares in state companies that are currently profitable and that have no financing problems. A very clear example - Romgaz, Hidroelectrica or Electrica,” Ivan explained.

iulian@romania-insider.com

(Photo source: Inquam Photos/George Calin)