Europe > Eastern Europe > Bulgaria > Romanian Rail Company Aims at Balkan Expansions

Bulgaria: Romanian Rail Company Aims at Balkan Expansions

2013/08/04

The Romanian government on Wednesday approved the privatization arrangement of Romania’s deficit-ridden rail freight company, CFR Marfa.

The company was sold last month for around 202 million euro to a local company, Grup Feroviar Roman, GFR.

GFR is part of Grampet Group, owned by Gruia Stoica, a low-profile businessman, but one of the richest Romanians, ranking eight in the Forbes rich inventory with an estimated wealth of some 450 million euro.

He made most of his fortune by selling scrap iron but presently owns several companies active mainly in transport.

In a related development, the Grampet Group on Tuesday announced it had been selected as sole bidder to purchase 75 % of HZ Cargo, Croatia’s rail transport company.

The sale could be completed in the following month, according to Croatian Transport Minister, Sinisa Hajdas Doncic.

The Romanian company, aiming at regional expansion, has as well put in an offer to take over the railway freight company in Bulgaria, hoping to become a key regional player, according to reports.

Some say Gruia Stoica will have difficulties in delivering on such major investments.

“As far as I know, GFR does not have the necessary money and is trying to borrow it from the banks. So, I am asking the government to follow carefully all next developments related to the CFR Marfa privatization,” Romanian President Traian Basescu said early this week.

Stoica replied that he is in talks with “five large international banks” and getting loans from them “is a matter of days away”.

Privatization of Romania’s rail freight company CFR Marfa has followed a tight schedule, as it was a government pledge to the IMF, which recently reviewed Romania's evolution in terms of reforms and privatizations.

Romania is running late in selling the natural gas producer, Romgaz, and its stake in the national carrier, Tarom. The Economy Ministry is still planning to finish selling minority stakes in the utilities companies Transgaz and Transelectrica.

In 2011, Romania failed to sell a minority stake in the oil company, Petrom, on the stock exchange. Romania is as well behind is in finding private sector management for other national-run companies.

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