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Dec 12, 2007 14:25 EEST
December 12 (SeeNews) - Romania expects to get at least one billion euro ($1.468 billion) from the sale of its railway freight company CFR Marfa, Transport Minister Ludovic Orban said on Wednesday.
"We hope to get at least a billion euro [from the sale of CFR Marfa], [...] considering the company's current position I think it's a realistic expectation," Orban told a news conference on the signing of a consultancy contract for CFR Marfa's sale with a consortium formed by the Romanian arm of international consultancy Deloitte and local law firm Bostina&Associates.
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The consortium must prepare the strategy in 90 days, Orban said but declined to give a timeframe for the privatisation itself.
CFR Marfa's net profit in 2006 stood at some 8.2 million euro. Its revenues exceeded 530 million euro.
"Our profitability has been growing steadily for three years now, we are expecting pretty much the same net profit in 2007 [as last year]," the company's general director Liviu Bobar told the news conference.
CFR Marfa employs some 19,000 people. It operates 987 locomotives, 50,980 wagons and two ferry-boats. It transported 52 million tonnes of freight last year.
CFR Marfa had a leading position among freight transportation companies in Romania with a market share of 14.4% in 2006. It was the seventh biggest railway freight company in Europe with 5.0% share last year.
Global ratings agency Standard & Poor's (S&P) in November lowered its long-term corporate credit rating on CFR Marfa to 'CCC' from 'B-', as the implications of the CreditWatch placement were revised to developing from negative. The downgrade reflected Marfa's increasingly weak liquidity position before the repayment of its 120 million euro Eurobond due on December 10.
"As for the 120 million euro Eurobond, it was repaid on December 10 so it will not affect the company's privatisation as CFR Marfa does not have any debts at the moment," Orban said.
The Eurobond was repaid through a 10-year syndicated loan, contracted with Raiffeisen Bank Romania as a lead-manager, Bobar said. He would not disclose the loan's value.
($ = 0.681 euro)
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