In order to prevent a repeat of the failure of the secondary offering of "Petrom", conducted by the state in summer 2011, investors are pressuring the authorities (ed. note: when compared to the price the stock is trading at), in the sale of blocks of shares in "Transelectrica" and "Transgaz", scheduled for the coming months.
Aside from that, Victor Cionga, managing partner at consulting firm "AZ Capital Advisors", thinks that some legislative changes are needed.
"In my opinion, in order to successfully conduct the SPO type offerings it is essential that the government make changes to the Government Decision 577/2002; that decision sets the procedure for the establishing the price at which the government's shares will be sold", Victor Cionga said in an interview.
According to him, the public sector clerks should be provided the comfort of a clearly formulated legal protection when they suggest the price at which a certain sale should be performed;
Mr. Cionga was the deputy general manager of Raiffeisen Capital&Investment, between 2003 and 2007.
Last summer he worked as the Romanian consultant of Renaissance Capital, the leader of the consortium which intermediated the secondary offering of Petrom.
Reporter: What steps do you think the government should take to prevent more failures of the privatization offerings conducted through the stock exchange? Do you think there is time to take such measures?
Victor Cionga: Let's make a brief recap: so far there have been three more substantial attempts at privatization through the stock market: two IPOs, meaning Transelectrica (in 2006) and Transgaz (in 2007) which successfully increased their capital; and a Secondary Public Offering (SPO) last summer, that of OMV Petrom, which failed because of known reasons, namely the perception of foreign institutional investors (who, in th
