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September 25, 2021

Competition Council: CFR Marfa debt to shares conversion – not state aid

The days left until the finalisation of CFR Marfa privatisation appear to be quite troubled, the Ministry of Transport being picketed by approximately 100 trade unions members with the Locomotive Drivers’ Federation who want the privatisation stopped, Mediafax informs. Federation President Iulica Mantescu notes the labour union members are allowed to protest at the Ministry of Transport for two weeks and adds that the representatives of the Federation have not been consulted in any pact made as part of the privatisation of CFR Marfa. ‘They want to sell the company at a much lower value than the market value, which is over EUR 1 bn. As far as we know, the European Commission has not approved the conversion of debts into shares.’
Regarding the conversion to stock of CFR Marfa’s debt towards ANAF, Competition Council Bogdan Chiritoiu told bursa.ro that the authorities had made a pre-notification to the EC, who had not also asked for a notification. ‘We were of the opinion that the conversion would not be state aid, as the Romanian authorities were preparing the company for privatisation. For that reason, we didn’t find it necessary to ask for the European Commission’s approval for the conversion of CFR Marfa’s debt into stock’. According to Iulica Mantescu, a new procedure for the sale of the majority stock in CFR Marfa may only commence after prior talks with the World Bank, International Monetary Fund and European Commission.
The President of the Federation of Locomotive Drivers further stressed that the employees of CFR Marfa wanted to sign a commitment with the company that would take over 51 per cent of the company, undertaking it to keep the same activity for the company, existing jobs and to provide active social welfare to the workers. ‘We are considering a lawsuit against the auction and even a petition to the European Commission,’ Mantescu also said. He said 40-50 per cent of the company personnel would be laid off after privatisation. According to him, the company now has a total of 9,000 employees plus another 1,700 operating in the subsidiary. CFR Marfa has a market share of 46-48 per cent.

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