Bloomberg News

E.ON Romania Chief Says Majority Stakes are Key in Any Sales

October 26, 2011

(Updates with additional comment from E.On, Enel officials, from second paragraph.)

Oct. 26 (Bloomberg) -- E.ON AG and Enel SpA aren’t interested in buying minority stakes in Romanian energy companies and the country must sell majority stakes to attract long-term investors, company officials said.

No investor is going to be buy a 10 percent stake in a company such as Hidroelectrica SA, Romania’s hydropower operator, because it would want to have full control over the company and investments, said Frank Hajdinjak, chief executive officer of E.ON’s Romanian unit, adding E.ON will analyze any government plan that involves selling a majority stake in an energy company.

“The Romanian state is interested in keeping the energy companies in its portfolio but I don’t think it will manage to build any hydropower plant with the money it gets from the sale of a minority package,” Hajdinjak said at a seminar today in Bucharest. “The country should sell at least 51 percent of Hidroelectrica or develop public-private partnerships to upgrade its outdated energy system.”

Luca D’Agnese, Enel Romania’s country manager, agreed with the assessments at the seminar.

The European Union and the International Monetary Fund are urging Romania to push ahead with sales of assets in companies such as Transelectrica SA and Transgaz SA as the country seeks to bolster state revenue and finance infrastructure projects, while cutting the budget deficit below 3 percent of gross domestic product next year.

--Editors: Douglas Lytle, Alan Crosby

To contact the reporter on this story: Andra Timu in Bucharest at atimu@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net


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