Miruna Suciu, partner with “Musat & Asociatii“, Attorneys-at-Law outlined
during the debate “Strategic investor vs capital markets privatization”, the most advantageous privatization method in the energy sector – for the state as well as for stakeholders.
Privatization of companies in the energy sector through a mixed method, where the majority stake is transferred to a strategic investor and the minority stake is sold by specific capital markets methods offers the highest advantages to the Romanian state. After their long experience in privatization consultancy and numerous successful transactions in the energy field, the attorneys of “Muşat & Asociaţii” consider this to be the optimal solution. “The specific advantages of the two methods are thus cumulated and the benefits are maximized for the involved public authority as well as for stakeholders (shareholders, employees) and the company in general”, stated Miruna Suciu, partner with “Muşat & Asociaţii” Attorneys-at-Law, during the debate “Strategic investor vs capital markets privatization”, held on June 5, 2007 at Marriott Hotel.
On one hand, privatization through a strategic investor ensures the necessary financing for the development of a company, managing capabilities, know-how and also establishing the necessary framework for the detailed planning and implementation of a long-term development strategy, elements of essence for the increase of energy safety and long-lasting development. An advantage is the possibility to apply the post-privatization strategy in a coherent manner that would lead to the fulfillment of strategic long and medium term objectives. “One advantage of co-opting an important strategic investor within the privatized company resides in the possibility to bring the acquired company into a coherent system of corporate governance and business ethics, meant to set conduct criteria in the relations with stakeholders as well as with clients, with third parties and the community in which the company operates” explained attorney Miruna Suciu.
On the other hand, the sale of a shares stake on capital markets facilitates drawing capital from the public, including from domestic investors. In this case, the price of shares will be set on the market, according to the existing demand, but also according to the company intrinsic value. “The capital markets privatization also creates additional obligations of continuous and transparent information for the listed company, for the benefit of the market and minority shareholders”, specified the “Musat & Asociatii” partner.
Used however as main privatization method, the sale on the capital markets of a share stake has the disadvantage of making possible the sale of shares to investors with no relevant experience in the area, whilst the subsequent transfer of shares may not be limited, being subject to the specific rules of the capital market. “The shareholding may be diluted, which at least in theory may hinder the company in adopting and implementing a medium to long term development and investment plan. Furthermore, the investors may not be required to meet any technical, financing or management conditions specific to the area of activity”, pointed out law firm expert. “In such circumstances, in addition to the increased transparency specific to the listed companies, combining the two methods would also provide the benefits of co-opting a strategic investor within companies in the energy field”, concluded the attorney Miruna Suciu.