Albania on a large privatization scheme this year

TIRANA, March 14 – Genc Ruli, minister of economy, trade and energy, said that the privatization of the state-owned oil and power distribution companies were the two main goals his government had set for this year.
The government has launched an international tender to sell 85 percent of its oil company, ARMO, and the power Distribution System Operator, considered the largest and most complex privatization in the history of the country.
ARMO’s tender was launched February 12 and continues until May 21. The bid will be awarded to a company certified in oil and gas processing. Also, the company to receive the bid should have shareholding capital no less than 55 million euro, no less than three years of experience and a consolidated balance of no less than 135 million Euros.
Some 15 companies had already expressed interest in the bid, according to the minister. In June, ARMO is expected to sign the contract with the winning bidder.
ARMO’s profit last year was 1.7 billion leks compared to 365 million in 2004.
Its basic capital could be 50-60 million euro, according to the minister, along with assets of about 100 million Euros.
The Hungarian fuel group, MOL, is among those 15 foreign firms that have shown interest in acquiring an 85 percent stake in ARMO.
The privatization process bids will be opened on 21 May and the contract with the winning bidder is set to be signed by June.
MOL signaled its interest on Wednesday, and Albania’s Minister of Economic Affairs, Genc Ruli, said his ministry expected more than these first 15 companies to participate in the bidding process.
ARMO runs two refineries, a large one in Ballsh, 40 km from the sea, with an annual processing capacity of two million tons, and a smaller one in Fier, plus a small network of filling stations selling motor oil and auto products.
The company posted a EUR 13.6 million profit in 2006.
Albania insists that the buyer be an oil and gas sector specialist with at least three years experience, share capital of EUR 55 million and certifications of maintaining international production standards.
Albania split ARMO from its tottering, oil-producing arm, Albpetrol before the sale to make the refiner more attractive.
Regarding the power distribution company, Ruli said the government has been assisted in preparing the privatization by three companies dealing with legal, financial and juridical concerns. The government hopes to conclude the power company’s international tender at the end of July and sign the contract a month later.