The state has finally signed the privatization contract for Romania's railway freight company CFR Marfa more than two months after the successful bidder was announced.

Romanian company Grup Feroviar Roman (GFR), the bid winner, signed the contract on Monday, September 2, after the company’s owner Gruia Stoica provided proof it had sufficient money to take over the company.

The buyer has to deposit EUR 20 million in an escrow account by October 4.

In June this year, GFR won the bid over CFR Marfa with a EUR 202 million offer for 51 percent of CFT Marfa's shares together with a pledge to further invest EUR 204 million in the company.

The payment will be made after the Competition Council gives its OK on the takeover.

The Council has a five-month deadline to give its positive or negative feedback on the takeover.

The privatization of CFR Marfa has recently been used as a ping pong ball between the Government and the presidency, with both the Prime Minister Victor Ponta and the President Traian Basescu making statements about the process and the winner.

Basescu said the winner in the privatization of state-owned company CFR Marfa did not have the money to pay for the company and was instead trying to borrow it from banks.

He added this was not a political game but that Prime Minister Victor Ponta needed to keep political responsibility for the privatization.

The PM however said nothing was wrong with the privatization based on the data so far and asked the president to 'mind his own business'.

“I would not be surprised however, in Basescu's well established tradition, to see that the firm or its owner gets a criminal file, because those who upset Basescu usually get criminal files,” said Ponta in response.

GFR was the only bidder left in the race for CFR Marfa after Transferoviar Grup - Donau Finanz was the last to withdraw, while the American OmniTRAX withdrew earlier in the process.

GFR, part of the Grampet group, recently accessed a EUR 54 million credit line from Eximbank, which will be used for the investments in the Bulgarian and Croatian privatizations.

CFR Marfa is the largest railway freight carrier in Romania with a turnover of EUR 261 million in 2011 and a loss of EUR 22 million. GFR is CFR Marfa's main competitor in Romania and the two companies together control 70 percent of the railway freight market in Romania.

editor@romania-insider.com