June 20, 2013 / 4:18 PM / 4 years ago

UPDATE 2-Romania finalises rail company sale required by IMF

* Sole bidder offers roughly 200 mln euros

* Privatisation risks legal challenges from former bidders

* CFR Marfa sale is key pledge under IMF aid deal (Recasts with conclusion of sale, adds tender winner, transport minister comment)

By Luiza Ilie

BUCHAREST, June 20 (Reuters) - Romania sold rail freight carrier CFR Marfa to sole bidder Grup Feroviar Roman (GFR) after hours of talks, sealing a deal whose failure could have threatened a 5 billion euro ($6.7 billion) International Monetary Fund (IMF) aid deal.

The privatisation of CFR Marfa was a requirement of the IMF agreement designed to shore up Romania’s finances and stabilise the leu currency, but the sale has been hit by one problem after another.

Earlier on Thursday, Transport Minister Relu Fenechiu said GFR had made an offer but tacked on conditions that required further negotiation.

“After seven hours of negotiations ... we can declare a winner in the tender to privatise CFR Marfa,” Fenechiu later told reporters. He said GFR will pay roughly 200 million euros for a majority stake in CFR Marfa, withdrawing a condition to pay in instalments.

The process is still complicated by the possibility of legal challenges from two bidders who had pulled out of the tender. U.S.-based OmniTRAX and a consortium made of Austria’s Donau-Finanz and Romania’s Transferoviar Grup said they withdrew because short deadlines made it impossible to assess CFR Marfa.

Prime Minister Victor Ponta defended the tender. “I don’t expect everybody to be satisfied,” he told reporters. “The process was as transparent as could be.”

It was unclear whether the IMF will say Romania has met its obligations under the aid deal or whether it will agree another extension.

The IMF declined to comment on Thursday, but Daniel Hewitt, emerging Europe economist at Barclays Capital, said it would be difficult for the IMF to say Romania has failed in its obligations because it has made progress in other areas.

“From the IMF’s point of view, they need a better reason to flunk them (Romania),” Hewitt said.

The European Union’s second-poorest economy has required IMF aid since 2009. Romania has not drawn on funds from the current aid agreement, but the deal was crucial for its financial credibility.

Successive cabinets have made great strides in lowering the budget deficit to below the EU’s 3 percent threshold, but all have repeatedly delayed asset sales and reforms of state-owned companies. ($1 = 0.7461 euros) (Editing by David Goodman and David Holmes)

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