Romania's Attempt to Sell Minority Stock in Petrom Fails

Romanian President Traian Basescu believes that the government’s recent failed attempt to sell a minority stake in the Petrom oil corporation via a secondary offering, while disappointing, underlined that Romania could not afford to sell the shares except for a “fair” price.

Basescu told TVR public television channel during an interview, “This was a market failure. To us, it was not what we wished for, but it was the right solution. I have seen public debates on what the selling price should have been. I can tell you that consultants recommended us to sell a share for RON (Romanian New Leu) 0.33 (11 cents at current exchange rates), at which the Petrom shares would have been sold without a question; we could have probably asked for RON 0.34 or RON 0.35. The Government did not accept other price that the median of the past 12 months, which included a bonus. The decision was not to get below this price for a simple reason: Romania should not be mistaken for a country that has to sell its assets to be able to pay pensions and wages. We faced this risk last year and we took the necessary measures. On the one hand, we wanted to sell, but at the right price,” Romania’s Agerpres government press agency reported.

By. Joao Peixe, Deputy Editor OilPrice.com