RAIFFEISEN BANK S.A.

  |  2013-02-08

Romanian Daily Report - February 8

Ministry of Finance borrows RON 500 mn through the issuance of 4.5-years T-bonds; Electrica sued CEZ, Enel and E.ON for not complying with the privatization contracts

Ministry of Finance borrows RON 500 mn through the issuance of 4.5-years T-bonds
Yesterday the Ministry of Finance borrowed RON 500 mn through the issuance of 4.5-years T-bonds, matching the initial intended amount. The bid to coverage ratio stood at 1.7, while the average yield was 5.79%, slightly higher compared to the average yield of 5.4% paid at a similar auction in mid-January, when the Ministry borrowed RON 3.1 bn through the issuance of 5-year T-bonds.

 

Electrica sued CEZ, Enel and E.ON for not complying with the privatization contracts
According to the media, state-owned Electrica, minority shareholder in several power distribution and supply alongside Fondul Proprietatea, sued Enel, CEZ and E.ON for penalties worth EUR 250 mn at the Arbitrage Court of Paris. Electrica claims the parties did not invest the amounts used for the share capital increases that brought them the majority stakes in the purchased entities, as stipulated in the privatization contracts. The three parties bought five out of the eight distribution and supply arms of Electrica. Enel bought Electrica Banat, Dobrogea and Muntenia Sud, CEZ acquired Electrica Oltenia and E.ON bought Electrica Moldova.  The companies in question received notifications and have 30 days to answer the allegations.
The trials are in an incipient form and they could be clarified before reaching Court. But they do not bode well for Fondul Proprietatea, whom we believe was hoping to sell its stake in the distribution and supply companies to the majority shareholders.

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