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Romania rail privatisation loses bidders

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(Globalpost/GlobalPost)

The privatisation of Romania's freight rail company, a key condition if the country is to renew its IMF credit line, was at risk of failing again Wednesday after just one bidder was left in the race.

The consortium formed by the Romanian firm TFG and Austrian investment fund Donau-Finanz pulled out of the tender for a 51-percent stake in CFR Marfa claiming it did not have enough time to conduct due diligence.

This follows the withdrawal on Monday of OmniTRAX, a US railway management group, and leaves only the Romanian transporter Grupul Feroviar Roman (GFR) in the race.

The sale of the heavily-indebted, loss-making carrier is one of the conditions set by the International Monetary Fund under its precautionary 3.5-billion-euro ($4.7-billion) credit line that expires at the end of this month.

A decision was expected on Thursday in the tender with a starting price of $230 million (172 million euros).

The Austrian-Romanian consortium said it had requested several times the tender be extended due to the complexity of the process.

"Reasonable deadlines are the only way to ensure equal treatment for investors," it said in a statement.

Romanian Prime Minister Victor Ponta said Wednesday the procedure was valid and stressed that Romania had to conclude the deal before an IMF board meeting due on June 26.

Romania's government has indicated it wants to negotiate a new agreement with the IMF later this year, although no amount has yet been mentioned.

The tender for CFR Marfa was relaunched last month after a first attempt failed when the same three companies were judged by the transport ministry as not meeting conditions for the sale.

CFR Marfa employs 9,000 people. In 2011 it posted a net loss of 93 million lei (20.6 million euros) on sales of 1.1 billion lei.

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http://www.globalpost.com/dispatch/news/afp/130619/romania-rail-privatisation-loses-bidders