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Romania's government approves terms of CEC Bank sale

Romania's government approved the contract terms for the sale of Casa de Economii si Consemnatiuni SA and invited the two bidders for the state-controlled bank to increase their cash offers.

National Bank of Greece SA and Hungary's OTP Bank Nyrt, competing to buy a 69.9% stake in the bank, known as CEC (Casa de Economii si Consemnatiuni SA), have until December 22 to improve offers they made in July, Finance Minister Sebastian Vladescu said in a news conference today broadcast on Realitatea television. „We'll send the contract and the request for improved offers to the two bidders now,” Vladescu said. „After we receive the offer, in the same day they can be opened and we'll make the results public.” He declined to comment on details of the contract.

Since selecting the two top bidders in July, the government delayed approving some contract terms and requesting final bids. Romania wanted clauses to prohibit the buyer from merging CEC with other units and to guarantee the state will retain at least a 25% stake, newswire Mediafax reported on November 9. CEC, the last state lender for sale in Romania, has the biggest network of branches in the country. Romania, which will join the European Union on January 1, has been selling state assets to increase efficiency of the economy.

A year ago, Austria's Erste Bank AG agreed to pay €3.75 billion ($5 billion) for 62% of Banca Comerciala Romana SA, Romania's biggest lender. Prime Minister Calin Tariceanu has warned that the government will receive much less money for its stake in CEC than it did for Banca Comerciala, though he didn't estimate how much the sale could draw. CEC Chairman Eugen Radulescu said in September a majority stake in the bank would be worth more than 500 million euros. On October 18, CEC said profit in the first nine months of the year jumped 10-fold to 32.8 million lei (€9 million) as it increased loans and began accepting corporate clients. (Bloomberg)