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The basic
privatization rules were laid out in the 1991 Privatization Act.
Privatization began with mass privatization, which was successful in
privatizing over 80 percent of residential housing, most small-scale
traders and over half of small-scale enterprises. After certificate
privatization ended in 1996, privatization moved to cash privatization with
the goal of selling most of the remaining state assets, in particular
large-scale enterprises in the energy and telecommunication sector. Several
larger Moldovan firms have been sold for cash and debt assumption to
strategic investors. The sale of a cement mill to a leading producer,
Lafarge, a leather processing firm, several textile producers, several wineries
and a hotel in the capital topped the list of transactions. There have been
three unsuccessful attempts to-date to sell a 40 percent stake in the state
telephone monopoly, Moldtelecom, via EBRD-supported tenders fell through in
1997-1998, preparatory steps have been taken for the second tender (there
have already been three unsuccessful attempts). Privatization of
agricultural enterprises begun in 1997 through liquidation of state farms
and distribution of ownership titles to private farmers. It began as a
pilot project of 73 farms and was expanded nationwide in 1998 with a goal
to complete titles transfer to more than 1 million farmers in 2000.
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In April 2001, the Department of Privatization and the
State Property Administration was removed from the subordination of the
Ministry of Economy and was renamed the Department of Privatization under
the Government, being the body authorized by privatization functions. Privatization
of property and land of the agricultural companies is carried out by Privatization
Commissions and Land Commissions, respectively, both which were formed
according to the Law on Privatization Program 1997-1998
(extended up to 2002).
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During
1997-2000, state property in the total amount of over 810 million lei was
privatized. During the same period, 12 commercial and 52 investment
tenders, as well as 24 direct negotiations were held, and 200 companies
were offered for sale, out of which 88 were privatized. In the same period,
the state shares of 531 companies have been sold. As of December 31, 2000,
92 percent of all dwellings became private. Privatization in
Moldova has also included an extensive land reform that was completed at
the end of 2002. Recently, there have been significant delays in
implementing the privatization strategy in Moldova due to political events
(change in government) and poor market conditions (important for the
privatization of telecoms). The largest privatization to date has been the
sale of half the country’s electricity network to Union Fenosa (Spain) in
1998.
On June 7, 2002, the Department of
Privatization launched the Investment Tender for the privatization of 51
percent of the shares of S.A."Moldelecom". Only one bid was
received, from the Russian company MGTS (Moscow City Telephone Network),
reportedly for US$20 million, even after the privatization adviser postponed
the deadline three times. The offer was rejected.
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- Privatization now focuses
on the energy, and wine producing state-owned enterprises.
- Several wineries, tobacco
and energy companies are up for sale (see schedule of upcoming
privatizations in 2002).
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