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Change at Romanian salt producer Salrom's board puts listing at risk - Fondul Proprietatea

Change at Romanian salt producer Salrom's board puts listing at risk - Fondul Proprietatea Salrom Slanic Prahova salt mine Author ( License: all rights reserved.

BUCHAREST (Romania), September 16 (SeeNews) - Romanian investment fund Fondul Proprietatea [BSE:FP] said on Thursday that the planned listing of salt producer Salrom, in which it owns a 49% stake, could be endangered following the replacement of several board members by the government.

The decision risks harming the company and jeopardizes important projects, such as the listing of Salrom on the Bucharest Stock Exchange and the evaluation of the options regarding the exploitation of the graphite deposits in Gorj, Fondul Proprietatea said in a press release.

The economy ministry owns the remaining 51% of Salrom.

In the fund's view, the new people on Salrom's board of directors appointed by the majority shareholder are those who held these positions in 2020 - the year in which Salrom's profit fell almost seven times and in which operating revenues fell by 36%.

"It is a legitimate question whether these are the right people to contribute to the listing of the company or to make the best decisions regarding the exploitation of the graphite deposits, a vital resource for the global energy transition," the investment fund added.

"Fondul Proprietatea has been sounding the alarm for many years and has always stated that for the economic development of Romanian state-owned companies, transparency, continuity, and professionalism are needed. We do not see that these conditions are met by the new composition of the Salrom board," Fondul Proprietatea portfolio manager and CEO of Frankin Templeton Bucharest Johan Mayer said.

The mandate of the new board will start on October 1.

Fondul Proprietatea said it will continue to support Salrom’s current board of directors and management based on their demonstrated business acumen through the introduction of efficiency measures at the company level and the initiation of investment projects that would support long term growth for the company.

The investment projects, if commercially viable, should be carried out by the company as it means more investments that stand to benefit all stakeholders: employees, local communities, and shareholders, it added.

In July, former economy minister Claudiu Nasui announced that Salrom will be listed on the Bucharest Stock Exchange and will expand into graphite mining. The procedures are expected to take at least a year to complete, Nasui said at the time.

Salrom, Romania's sole edible salt producer, was founded in 1997 by reorganising the former Regia Autonoma a Sarii Bucuresti in seven branches in the country. Its main products are rock salt solution, recrystallized salt and limestone. It employs some 1,500.

Salrom's net profit fell to 11.5 million lei ($2.8 million/ 2.33 million euro) in 2020, compared to 77 million lei in 2019, while revenues decreased by 37% to 300 million lei, data posted on its website showed.

Fondul Proprietatea shares traded 0.69% higher at 1.7460 lei on the Bucharest Stock Exchange at 1416 CET on Thursday.

(1 euro=4.9482 lei)