Alro Slatina, perhaps the best company that is still state-owned, was included on the privatisation list. However, the problem lies in making the most appropriate decision, in determining if selling it is the best solution as the company is deriving high profits, it is well managed and at the moment the state does not desperately needs foreign currency.
Slatina-based Alro is a leader on the Bucharest Stock Exchange, owning over half of market capitalisation.
According to current market prices, Alro is worth 97.31 million dollars, 7.62 dollars per share respectively, but brokerage companies consider that stock is easily worth 12-14 dollars per share, that is a market value ranging between 153-178 million dollars.
Output is exported in a 70 percent proportion, and most of the company's customers are from the European Union.
While the Romanian economy has posted an uninterrupted free-fall for three years, Alro achieved significant growth, its net profit recording a four-fold leap last year.
The company's high-performance management made Alro succeed in borrowing from foreign banks at a lower cost than the Romanian state. Under such circumstances, the appropriateness of selling Alro can be now brought under discussion since any investor would point to Romania's country risk, so as to be able to offer a very low price.
On the other hand, capital market operators display different opinions about the sale and about the future of the company.
"At present, Alro is carefully administrated. SOF (State Ownership Fund) does not assert its quality of owner in a manifest way, while the Management Board enjoys much freedom of decision. Anyway, the current favourable situation of the world aluminium market argues for selling the company, but such a move has to be made very carefully," Vanguard brokerage company manager Ladislau Csorba said.
However, Csorba believes that politicians and state officials proved that they were not able to manage business, therefore, in the long term, postponing the sale would involve great losses for Alro.
Valentin Ionescu, head of operations with EuroInvest Vision, believes that "a sell decision would be unfortunate in this case. It would be like giving up the pearl of the crown. Alro is a new plant, it sports exceptional financial results and exports more than half of its production. These are the reasons for us to hold on to such a company."
Alro trade union is vehemently opposing the sale of the company and the management indirectly supports the same position. In case the decision to sell is made, the question is who would be the best buyer: an aluminium manufacturer, a trader or portfolio investors that would interfere less in the management process.
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