ECONOMY

July 17 is the deadline for final bids for Romania’s CEC

BUCHAREST (Reuters) – Romania has set a July 17 deadline for binding offers in the sale of its fifth largest bank Casa de Economii si Consemnatiuni (CEC), a senior official from one of the bidding banks said on Friday. The Black Sea state has been postponing the sale of a majority stake in CEC for months, hoping to get a higher price for the savings bank, which had been losing market share since the fall of communism in 1989 until late last year. «July 17 is going to be the date for submitting binding offers,» Steven van Groningen, CEO of Raiffeisen Bank Romania, told Reuters in an interview. «Then the first two or possibly first three bidders will be invited to submit improved offers.» He said no further deadlines were specified in a letter sent to bidders by the Finance Ministry. The ministry has said it wanted to complete the sale of CEC. in which it is offering a 69.9 percent stake, by the year-end. In May, the finance minister said he expected the sale to value Romania’s oldest bank at 1 billion euros ($1.27 billion), while analysts estimated last year it may fetch around $650 million. Groningen declined to say what price tag Raiffeisen attached to CEC, which has a book value of 250 million euros, but said the Austrian bank was still interested in the bidding. «We are bidding because we think it is a good opportunity and because it is complimentary to what we have today,» Groningen said. «We think we are in a good position because there are a lot of synergies.» Six European Union banks, aside from Raiffeisen whose unit is the third largest bank in Romania in terms of assets, filed non-binding bids for CEC last October. These banks are: Franco-Belgian Dexia, National Bank of Greece and Greek rival EFG Eurobank, Austria’s Erste Bank, Hungary’s OTP and Italy’s BMPS. Earlier this week, CEC head Eugen Radulescu told Reuters the price may be boosted because the sale offers the last chance for investors to win a major bank in fast-growing emerging Europe. The price offered will have a 75 percent weighting in the final score and the Finance Ministry reserved the right to further postpone the process in its letter, Raiffeisen Bank said. CEC, which is popular among the poorest Romanian pensioners and farmers, operates a network of 1,400 branches also covering under-banked rural areas, where billions of euros from the EU funds may flow after Romania’s entry in 2007 or 2008. The 142-year-old bank controlled a third of the market in terms of assets and 99 percent of individual deposits in 1990, compared with the current 4.5 percent and 25 percent, respectively, CEC said.