Romanian government considers delaying CEC bank privatization
BUCHAREST – Romania is assessing possible postponement of the sale of its fourth-largest bank, CEC, to get a better price, but has not yet made a decision, Prime Minister Calin Tariceanu said on Thursday. «In theory, the possibility of a postponement of the privatization exists,» Tariceanu told a news conference on Thursday. «No decision was taken.» Romanian officials said earlier the sale strategy for Casa de Economii si Consemnatiuni (CEC) was still under discussion, raising concern among some bidders that the sale may be delayed. Tariceanu said the privatization of the country’s biggest bank, BCR, was a big success last year because a 25 percent stake held jointly by the European Bank for Reconstruction and Development and the World Bank’s investment arm, IFC, boosted the bank’s value. Romania sold the BCR stake to the EBRD and the IFC in 2003, after attempts to privatize the bank failed due to lack of bidders because of world economic woes. «It may be interesting to use such a formula for CEC, but if we take such a decision we will announce it publicly,» Tariceanu said. Late last year, seven EU banks filed non-binding bids for CEC. They are French-Belgian bank Dexia, Greek banks National Bank of Greece and EFG Eurobank, Austria’s Raiffeisen and Erste Bank, Hungary’s OTP and Italy’s BMPS. Raiffeisen Bank Romania Vice-President James Stewart said the quicker the government made a clear announcement regarding the sale the better it would be. «I think the longer the government takes to make up its mind, it’s very bad for Romania, because the government loses credibility,» Stewart said. «There’s an old saying: When everybody wants to buy something, that’s the time to sell it.» Bidders want clarity The government had set a tentative deadline of end-January for binding bids, but this looks increasingly unlikely. «We hope that we get a clear indication from the government that they will move the privatization forward fairly quickly, but if it doesn’t happen… it won’t put a dent in what we’re doing,» Raiffeisen’s Stewart said. Other bidders also said they were eager to hear what the government will decide. «We are interested in the Romanian banking sector and we will be waiting with interest what the Romanian government decides to do with CEC,» Paul Mylonas, National Bank of Greece chief economist and head of strategy, told Reuters. The government has offered a stake of between 50 percent plus one share and 75 percent in CEC, which has a book value of 200 to 250 million euros ($300 million). Analysts had said the sale, which could be one of the few remaining opportunities to acquire a big retail bank in fast-growing eastern Europe, might fetch as much as $650 million. CEC, which is still popular among the poorest Romanians, pensioners and farmers, owns almost half of all bank branches in the country of 22 million and boasts an almost exclusive network in the under-banked countryside.
