15 years after the restructuring of SNCFR, Romanian authorities have finalized the privatisation of the national railway freight operator, CFR Marfă. The value of the contract on the sale of 51% of the company’s shares to Grup Feroviar Român (GFR) was set at EUR 400 Million, of which EUR 202 Million is the cost of the acquisition and EUR 200 Million is the amount necessary for the transfer of the shares, plus EUR 1.5 Million, environment investments. The starting price of the tender was of EUR 180 Million.
By taking over CFR Marfă, GFR will become the most important player not only in the Romanian market, but also in the European rail freight transport market. “We believe that, after a period of restructuring and effective activities for CFR Marfă, because this is the first thing we want to make, to make this company efficient so that it would no longer be the black hole of the Romanian economy, as it is called now, we could integrate this company and, together with GFR, with our companies from Hungary and Bulgaria and our shipping houses from Moldova, Ukraine, Germany, Austria, Montenegro, Serbia, we could have a say in the transportation market in the serious competition that we have from the other railway operators in the West”, declared GFR CEO, Sorin Chinde.
However, the finalization of the privatisation procedure and the takeover of shares by GFR will require the approval of the Competition Council (CC) as the two companies will together have a 70% in the market. “The Romanian Competition Council (CC) has initiated talks with EC representatives (EC) on CFR Marfă privatisation process and the two authorities will decide whether the takeover of the national railway freight operator by Grup Feroviar Român (GFR) will form an economic monopoly, declared CC President Bogdan Chiriţoiu. Currently, the two institutions are exchanging information and expect for GFR’s notification because the company has to elaborate its own notification file. After receiving the notification, CC has three options: to approve the transaction, to refute it or to accept the condition on specific conditions. “We will have to see how large the company is in the respective market, what the dimension of the market is and if it risks to damage competition, we will see if there are remedies. The remedies can be of behaviours, for example, the company commits not to increase prices for a specific number of years, or structural, to sell certain assets in a specific number of months”, explained the CC President.
At the beginning of April, the Romanian Ministry of Transport published the announcement regarding the offer to sell CFR Marfă’s stakes and three investors submitted bids: Grup Feroviar Român, Omnitrax and the consortium of Transferoviar Grup and Donau-Finanz GMBH. After the procedures, the ministry rejected all three offers and changed the participation criteria a day afterwards. When the privatization procedure was re-launched, the three companies bought the tender book. After analyzing the documents, Omnitrax didn’t submit either the preliminary and non-binding offers or the comments on the purchase agreements and was disqualified. The privatization was continued by GFR and Transferoviar Grup and Donau-Finanz GMBH. On 19 June, the latter decided to withdraw from the sale of CFR Marfă. GFR was selected winner of the sale procedure of CFR Marfă on 20 June 2013.
Regarding GFR’s activity, the company holds the top position in the domestic transport of oil products and permanently expands its activity area covering more and more varied products – coal, aggregates, crushed stone, cinder, cement, clinker, grains and so on. In 2010, GFR became the most important supplier of rail services for Petrotel LUKOIL and ROMPETROL Group. As of 2012, GFR became member of USER (Romanian Association of Freight Forwarders) and member of FIATA (International Association of Freight Forwarders). In 2003-2004, GFR became member of UIC (International Union of Railways), OCCF (Organisation for the Collaboration of Railways), CIT (International Rail Transport Committee) and CER (Community of European Railway and Infrastructure Companies). On the international market, since 2010 GFR has been providing the first transport from Romania to the Republic of Moldova, in partnership with Moldovan Railways and is also collaborating with transport operators it manages in Bulgaria and Hungary: Bulgarian Railway Company (BRC) and Train Hungary (TH).
Currently, GFR exploits a fleet of over 9,900 cars and 275 locomotives. CFR Marfă has a rolling stock fleet of over 39,000 cars (of which only 23,000 are currently functional) and more than 900 locomotives, the volume of its assets placing the company in a favourable position compared to other state-owned operators in Central and Eastern Europe.
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