CFR Marfă’s value dropped 50% in 5 years

Some market analysts indicated that the moment chosen by Berceanu is late, comparing this with the privatization of the Romtelecom landline operator, which also came at a bad time, when the company had lost some of its value. In 2004, the company’s advantage lay in the fact that national markets were closed and unliberalized, and CFR Marfă was a dominant player, according to Ştefan Roşeanu, Secretary General of the Railway Industry Association (AIF). However, in the new economic context, he added, CFR Marfă’s value is calculated also on its European potential, in addition to the national potential.

The privatization process also requires the layoff of 8,500 employees, or 50 percent of CFR Marfă’s staff. Mihai Frăsinoi, the company’s General Manager, said that only in such conditions will the company be able to repay its debts and post a profit in 2010, to become a target for foreign or local strategic investors. Moreover, some 11,000 CFR employees are to be laid off this year or in 2010, which means 15 percent of the total. This measure could generate salary-related savings worth approximately €50 million next year, but the final decision will be announced early next week.