The Sovereign Investment Fund, project completed by Finance Ministry: 27 companies worth EUR 10bn

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The draft Law on the Establishment of the Sovereign Development and Investment Fund (FSDI) has been finalized and launched Wednesday night for public debate by the Ministry of Finance (MF), the institution that will oversee the Fund. It will include 27 minority or majority state holdings in profitable companies with an accounting value of about RON 45 billion (EUR 10 billion), adevarul.ro informs.

The draft law will be sent to the Government with the advice received from Eurostat (ex-ante opinion) on the classification of the Fund (budgetary/off-budget) and the Executive may approve it in a September sitting and then forward it to Parliament.

The project was drafted together with representatives of the Ministry of Economy, Ministry of Energy and the Ministry of Labour, as well as with the consultation of representatives from other public institutions, within a working group and an inter-ministerial committee approved by the Government. The Romanian State will be the unique shareholder of the FSDI.

The Fund’s share capital will consist of an in-kind contribution, represented by the stock packages, and of cash contribution worth RON 1.85 billion, of which RON 50 million will be paid upon establishment in 2017.

The fund will include: Engie Romania (34% of the shares are owned by the Romanian state), Electrica (48.78%), Delgaz Grid (13.51%), E.ON Energie Romania (31.82%), Biofarm (1.16%), Chimcomplex (12.89%), OMV Petrom (20.63%), Telekom Romania Communications (45.99%), Antibiotice (53.02%), National Company for Control of Boilers, Lifting Installations and Pressure Receptacles (100%), Romanian Lottery (100%), National Salt Company (51%), IAR SA (72.19%), Oil Terminal (59.62%), Cupru Min (100%), Unifarm (100%), National Company for Mineral Waters (100%), National Company for Maritime Danube Ports Administration (92.3%), the Company for Investments in Tourism (100%), Romgaz (70%), Hidroelectrica (80.05%), National Company Bucharest Airports (80%), Nuclearelectrica (82.49%), the National printing Works (100%), the Administration of Maritime Ports (80%), Power Management Company (100%) and Conpet (58.72%).

The 27 holdings have generated in the past years dividends of about RON 2 billion, which is the average dividend for the past three years, which have been collected by the budget.

“The draft normative act will have an impact on the state budget revenues as of 2018 to reduce revenues to the state budget by the amount of dividends received by FSDI in the shares transferred to the FSDI portfolio. This influence will be recovered in the years following the first year of operation, by collecting the dividends that FSDI will pay to the state as sole shareholder, according to the Shareholders’ General Meeting decision on profit distribution and dividends,” the substantiation note of the draft bill reads. Once the Fund is set up, the dividends of these companies will be collected by the Fund.

 

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