Romania may raise an estimated 377 million euros ($464 million) from the sale of a minority stake in energy company Electrica Muntenia Sud to its owner, Italy’s Enel SpA, this year.
The Bucharest-based Cabinet approved a memorandum today to go ahead with the sale of a 13.57 percent stake in the power company to Enel by December, Andrei Zaharescu, a government spokesman said in a phone interview today. The administration will hold talks with Enel to conclude the sale, which is part of an option from a 2008 contract when the Italian company bought a majority stake in the unit.
Romania is seeking to sell minority and majority stakes in energy companies to meet pledges to the International Monetary Fund and the European Union and boost state revenue as the economy entered the second recession in three years in the first quarter. Electrica Muntenia Sud is a former unit of the country’s state-owned power distributor Electrica SA.
“Part of the money obtained from the Electrica unit stake sale will be used to fund investments and the upgrades needed in the electricity sector,” Finance Minister Florin Georgescu said. “Some money will also go, indirectly, to the state budget.”
Romania’s government holds a 23.57 percent stake in Electrica Muntenia Sud, while the country’s property fund, Fondul Proprietatea SA, holds a 12 percent stake.
The government can also exercise a contract option to sell another minority stakes in the Romanian units of E.ON AG to its majority owner.