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Legislative start for the establishment of the Sovereign Fund of Romania

By Emea Riga
A legislative proposal on the establishment of the Sovereign Development and Investment Fund (FSIDI) SA was registered at the Standing Bureau of the Senate, the upper house of Parliament.
The list of proposed economic operators to be part of the FSIDI portfolio contains 89 companies. Among these companies are: Hidroelectrica SA, Romgaz SA, National Romsilva RA, SN Nuclearelectrica SA, Romanian Lottery, Romanian Car Registry, CFR Călători SA, National Company of Uranium SA, Romanian Post SA, National Company Unifarm SA, Publishing House Didactics and Pedagogy, Metrorex SA, CEC Bank, OMV Petrom, Rompetrol Rafinare SA.
"The Sovereign Development and Investment Fund aims to directly support economic development by investing in competitive sectors that lead to a multiplier effect in the economy, following the attraction of capital and sources in the financial market," the statement explains.
It is noted that the governance program 2017-2020 foresees the implementation of a medium to long-term economic development strategy, including through the creation of new investment instruments.
"Thus, the creation of a sovereign investment fund is a necessary measure of economic stimulation by means of which, following the drawing of capital from the domestic and international financial market, sources of financing for profitable and sustainable investment projects that will have an effect of multiplication in the economy, leading to development, in parallel with the increase of budget revenues, "the initiators mentioned.
Funding FSIDI will be made from revenue from dividends received from its portfolio companies, from financial instruments and from other entities, from proceeds from the sale of portfolio shares, loans, including through the issuance of bonds, but also from other sources provided by law.
FSIDI will take the form of a joint stock company, whose sole shareholder is the Romanian state, throughout its lifetime.
"FSIDI's share capital will consist of a contribution in kind represented by state-owned shares in the companies that will be in the FSIDI portfolio as set out in the annex to this bill, as well as cash contributions. owned by FSIDI, and it will dispose of it freely as its own property.In the case of companies in which, at the date of the takeover, the State is wholly owned or majority, FSIDI will not be able to alienate, in any form whatsoever, the loss of the position of majority shareholder of FSIDI in the companies concerned ", provides the explanatory memorandum.
According to the same sources, the FSIDI administration will be done in a dual system, by a supervisory board and a directorate. The first members of the Board of Supervisors will be appointed by Parliament decision, at the proposal of the shareholders, having the mandate to employ the management and organize the activity of FSIDI. The initiators mention that the legislative proposal will have an impact on the state budget revenues starting in 2018, in order to reduce the revenues to the state budget with the value of the dividends received by FSIDI for the shares transferred to the FSIDI portfolio.
"This influence will be recovered in the years following the first year of operation by collecting dividends that FSIDI will pay to the state as sole shareholder, in accordance with the decision of the General Shareholders' Meeting to distribute profits and establish dividends. The legislative proposal also provides for cash paid out of privatization revenues in the amount of ROL 9 billion, of which 50 million ROL will be paid up in the year 2017, the remainder being paid within two years at constitution, "the statement of reasons also states.

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