ROMANIA’S PREMIER BUSINESS WEEKLY SEPTEMBER 15 - 21, 2014 / VOLUME 18, NUMBER 30

INTERVIEW: The era of major investments in Romania’s renewable sector is over, according to Martin Zmelik, countrymanager of the Czech utility group CEZ in Romania, which operates a 600MW wind farm locally »page 10

PROPERTY

Mall systems goProdplast Imobiliarehas begun work on aEUR 60 million shop-ping mall in Oborwhich is expected tobe completed in thefirst half of 2015» page 8

LINKS

Under suspicionLocal IT companySiveco is being investi-gated for tax evasion,accused of creating acriminal network of 50firms that carried outfictitious transactions» page 11

BVB turns to IT

THE BUCHAREST STOCK EXCHANGE (BVB) IS INVITING IT &C COMPANIES TO LIST IN A KEY MOVE DESIGNED TO INCREASE THE ROLE OF THE CAPITAL MARKETS FOR START-UPS AND ENTREPRENEURS » PAGE 4

UKRAINE’S LOSS, ROMANIA’S GAIN?

With PE investments in Ukraine falling to afive-year low of EUR 19 million in 2013 and

the country hit by ongoing conflict, Romaniais in a good position to attract fresh

investment from the region, saydealmakers» page 6

With PE investments in Ukraine falling to afive-year low of EUR 19 million in 2013 and

the country hit by ongoing conflict, Romaniais in a good position to attract fresh

investment from the region, saydealmakers» page 6

NEW S 3www.business-review.eu Business Review | September 15 - 21, 2014

NEWS in briefNEW S 3

ENERGYHalliburton eyes local oil andgas sectorUS oil services group Halliburton islooking in Romania for new businessin mature oil fields and in the devel-opment of new fields off the coast,according to a government statement. Prime Minister Victor Ponta last week met Joe Rainey, eastern hemisphere president of the Americancompany. The PM said he wanted Romania to become a hub for US oilfirms.

Government ponders IPO forOPCOMRomania’s energy exchange OPCOMcould be listed on the Bucharest StockExchange (BVB) after its transfer fromgrid operator Transelectrica to the De-partment of Energy, in one of theprospective moves being consideredin a bid to extend its shareholdingstructure, said Razvan Nicolescu, thedelegate minister of energy, quotedby Mediafax newswire. He said thelisting could take place before the IPOsof large energy companies Hidroelec-trica and Oltenia Energy Holding,which should come in late 2015, ac-cording to analysts.

LEGALParliament passes cut in CAS The Chamber of Deputies approvedlast week a five percentage point re-duction in the social insurance con-tributions (CAS) paid by employers.The bill had been rejected by PresidentTraian Basescu, who asked MPs to re-examine it. His request was turneddown. The cut should be enforcedfrom October and would cost the statebudget EUR 192 million in the fourthquarter of this year. The measure hasnot been vetted by the InternationalMonetary Fund.

Government backs reductionof construction tax to 1 percentThe government is aiming to cut the construction tax adopted this year from 1.5 percent to 1 percent from 2015, with the collected fundsto be distributed to local authorities,said Ioana Petrescu, minister of finance. The tax impacted primarilythe infrastructure of energy and telecom companies. It is levied on the book value of constructionsand has to be paid in two installments.

TRADEUS-Romania trade exceedsUSD 1.4 bln in H1Trade with the US amounted to overUSD 1.4 billion in the first six monthsof the year, while American direct in-vestments in Romania reached USD1.2 billion, making the country the12th biggest foreign investor in Ro-mania, according to data cited by theMinistry of Economy. Commentatorssay US FDI to Romania does not in-clude investments made by Americancompanies through subsidiaries inWestern Europe.

Romanian exports hit recordhigh of EUR 4.8 bln in JulyExports rose by 12.7 percent in Julyagainst the previous month and 6.6 percent against July 2013 to arecord high of EUR 4.8 billion, according to data from the nationalstatistics office, the INS. Importsamounted to EUR 5.3 billion in July,

up 4.8 percent compared to the pre-vious month and 10.5 percent againstthe same period of last year. Romanianexports reached EUR 30.3 billion inthe first seven months, while importsstood at EUR 33.6 billion. The tradedeficit grew by EUR 248 million toEUR 3.3 billion in the first sevenmonths compared to the same periodof 2013.

BANKSLocal banking system lost EUR114 mln in JuneBanks in Romania sustained losses ofaround EUR 114 million in June, re-ducing their combined profits to EUR47.5 million after the National Bankof Romania (BNR) asked lenders toremove some bad loans from theirbalance sheets. The move led to a re-duction of over EUR 455 million inprovisions in the same month, accord-ing to Mediafax newswire.

T party: telecom duo celebrate connectionBucharest was adorned with a T as sister companies Romtelecom andCosmote celebrated their new brand identity under the name TelekomRomania, as part of the Deutsche Telekom family. The campaign included aseries of dedicated interactive events in Bucharest, Iasi and Cluj-Napocaunder the tagline “Turn on Magenta”. By the end of the year, 43 corporatestores will be entirely renovated to reflect the new identity.

MOST READ www.business-review.eu

1 Romanian IT company Sivecounder investigation for tax fraud

2 Romanian soldier dies in militaryexercise in Germany

3 Confirmed by Juncker: MEP Corina Cretu to have the RegionalPolicy portfolio

4 New national strategy to boostRomania’s competitiveness highlights 10 economic sectors

5 Beraria H will have its grandopening on September 12

WEEK AHEAD

September 15Back to school The new school year officially beginstoday and will continue uninterrupteduntil winter break, which starts on De-cember 19, according to the scheduleannounced by the Ministry of Education.

September 18IDC's ICT in the Utilities & Energy Sectors 2014This IDC Energy Insights event will ex-plore long-term trends in the utilitiesindustry. The event brings togetherleading industry and technology ex-perts, creating a platform to address key issues facing IT executivesin the energy and utilities sectors. For more information, contact Cristina Pasla, conference manager, at cpasla@idc.com.8.45, Hotel Intercontinental.

September 19Gabroveni Inn opensThe restoration, extension and func-tional remodeling of Gabroveni Inn,which began in 2008, has been com-pleted and the historical building will be reopened to the public this Friday as ArCuB’s new headquarters. The restoration process cost EUR 5.2million.

September 16-19Stand-by agreement evaluation inBrusselsA delegation made up of government

and Central Bank representatives willbe in Brussels to participate in the nextevaluation mission of the IMF's stand-by agreement with Romania. For thefirst time since the evaluations began,Romanian officials will meet represen-tatives of the IMF, World Bank and Eu-ropean Commission outside thecountry and without the participation ofthe Presidency or political parties.

Photo: M

ihai Constantineanu

4 NEWS www.business-review.eu Business Review | September 15 - 21, 2014

MEDIA

Russia Today could enterlocal media marketDan Musetoiu, former director

of programs for The MoneyChannel, is planning to launch

a new project under the name RussiaToday.

Musetoiu has applied to the Na-tional Office for Inventions and Brands(OSIM) to register the trademark “Rus-sia Today,” according to reportervir-tual.ro. The TV producer confirmedto DailyBusiness.ro that he is planningto launch a product under the brand.Asked if it will be an offshoot of theRussian channel of the same name,he declined to comment.

Musetoiu has extensive experienceworking in television. He was previ-ously program director for The MoneyChannel, but is no longer working forthe TV outlet. He was also generalproducer in the news section of B1 TV.Before working for B1, Musetoiu wasgeneral producer for Agro Channel TV.Prior to that, he was part of the teamthat founded Publika TV station inthe Republic of Moldova.

Musetoiu was also a correspondentfor the public channel TVR in Detroit,in the United States, and hosted shows

for the public television broadcaster.He has worked as a news producer atAntena 1 and general news editor atPro TV and National TV.

Russia Today (RT), the Russian-based international cable and satellitetelevision channel, was launched bythe country’s state-owned newsagency Ria-Novosti in 2005.

The channel, which is headquar-tered in Moscow, presents round-the-clock news bulletins, documentaries,talk shows and debates, as well assports news and cultural programs onRussia aimed at the overseas newsmarket.

RT operates as a multilingual serv-ice with channels in three languages;the original English language channelwas launched in 2005.

RT has been widely accused of providing disinformation and com-mentary favorable to Russian foreignpolicy. Several of the TV station’s employees publicly announced their resignation in protest at the outlet’s pro-Putin spin and biased content. ∫

Otilia Haraga, Diana Petrescu

STOCK EXCHANGE

BVB woos IT firms withoverhauled trading system

The Bucharest Stock Exchange(BVB) is seeking to lure high flyingfirms in the IT sector to list by

promising an overhauled trading plat-form and increased visibility and financ-ing options for companies.

Ludwik Sobolewski, CEO of the BVB,said that the alternative trading system(ATS) would be relaunched later thisyear and would have a wider focus, fromstart-ups to established companies.

“This market offers new possibilitiesto businesspeople interested in devel-opment,” said Sobolewski. He addedthat it will not be just for IT related com-panies. On September 23, a workshopwill take place in Bucharest for candi-dates interested in listing. A similarworkshop will be organized in Cluj thenext day. The CEO launched a similarmarket in Poland during his tenure ashead of the Warsaw Stock Exchange.The platform, called New Connect, hasproven popular amongst entrepreneursand over 400 companies have listedhere in the past seven years.

Strong IT listing historyAccording to Andrei Pitis, president ofthe Employers’ Association of the Soft-ware and Services Industry (ANIS), theRomanian IT industry has a good imageabroad and can generate confidencecapital, which can get foreign investorsonboard.

“For the past ten years, I have beensaying repeatedly that the only thingtruly missing from the Romanian econ-omy is a functional stock exchange. Thestock exchange has changed from whatit was five to seven years ago and nowhas an element of stability,” said RaduGeorgescu, founding partner of GECADGroup, a technology company.

“For IT entrepreneurs, the stock ex-change is very important for variousreasons. Firstly, it is a way of attractingcapital; secondly, it provides a marketing

element; thirdly, it is a way of makingan exit; and, last but not least, it also lets investors have corporate governance. If we manage to bring theIT industry on the stock exchange, thiswill be a huge step for us all,” saidGeorgescu.

“I would absolutely support the listingof IT&C companies on the BVB. A listingon the stock exchange is the best thingthat can happen to a company.”

When asked why he has not yet listedany of his own companies on the stockexchange, the entrepreneur answered,

“I always have projects that need financingbut from my point of view, the Romanianstock exchange has not existed untilnow.” Around 10-20 local IT&C firmscould be candidates to float on the ATS,commented the entrepreneur.

The first port of call for an up-and-coming entrepreneur is the so-calledthree Fs (friends, family and fools), whichpundits say is a popular starting pointfor financing entrepreneurial projectsin technology, IT, and online.

Another option to consider is scoutingfor a business angel. Seed or businessangel financing is becoming a frequentlytaken path, as are venture capital funds,which are a little more rigid. The bankis another option, if the entrepreneur isable to put on the table a very clear in-vestment project and guarantees.

Dragos Pislaru, general manger ofGEA Strategy & Consulting, said thatthere are “exceptional oases” in ten keysectors of the Romanian economy, notjust in IT, citing energy and bio-economyas fast-growing industries.

At the moment the BVB is workingwith the Financial Supervision Authority(FSA) and the government to removesome of the red tape and additionalcosts that could dent the attractivenessof the platform for retail and institutionalinvestors. ∫

Otilia Haraga, Ovidiu Posirca

Radu Georgescu, GECAD Group (left), Andrei Pitis, ANIS, Ludwik Sobolewski,BVB, Dragos Pislaru, GEA Strategy & Consulting

NEWS 5www.business-review.eu Business Review | September 15 - 21, 2014

BANKING

Conversion of swiss franc loans couldharm lending activity, cautions Ghetea

Radu Gratian Ghetea, presidentof the Romanian Banking As-sociation, has warned that a

court ruling ordering the conversionof Swiss franc loans into RON will nothelp lending recover.

A court in Galati ruled last weekthat Volksbank must convert a loantaken out by a customer in swiss francsinto the local currency at the exchangerate when the loan was taken out, with an additional increase of 10 per-cent. One of the contract clauses stip-ulated that conversion could be re-quested by the borrower if the ex-change rate increased by 10 percentfrom the moment when the loan wastaken out.

In addition, the court ordered thescrapping of the bank’s risk commis-sion, as it was deemed abusive, andordered the lender to pay it back tothe client, reported Mediafax newswire.According to media reports, Volksbanksaid it would challenge the ruling.

“The sums are not negligible, theimpact of changing lending conditionsin various ways – at the exchange ratefrom the moment the loan was granted,the transformation at the client’s re-quest from one currency to one otherthan the RON transformation – the ef-fect is very significant and the ARBhas submitted the information it hadto Parliament,” said Ghetea. ∫

Ovidiu Posirca

EU

Romania secures plum regional policy portfolio in Juncker Commission

Romanian social democrat MEPCorina Cretu was last week ap-pointed EU Commissioner for Re-

gional Policy, thereby landing one ofthe most sought after portfolios in thenew European Commission (EC) led byJean-Claude Juncker, the EC has con-firmed. With an allocation of EUR 351billion, or about a third of the EU’s totalbudget, for the period 2014-2020, re-gional policy is the second largest budg-etary area after agriculture. The moneyis available through Structural Fundsand the Cohesion Fund and is meant tohelp “reduce structural disparities be-tween EU regions, foster balanced de-velopment throughout the EU and pro-mote real equal opportunities for all”.

Cretu, 47, is a member of the SocialDemocrat Party and has been an MEPsince 2007. Between 1992 and 1996 andagain from 2000 to 2004 she wasspokesperson and presidential counselorto former president Ion Iliescu. Beforebecoming a politician, she worked as ajournalist. Although Cretu graduated

from the Cybernetics Faculty at theAcademy of Economic Studies inBucharest, she has little professionalexperience in the economic field, whichhas previously prompted questionsabout her suitability for the position.Romania’s other proposal, besides Cretu,was Dacian Ciolos, the former Agricultureand Rural Development Commissioner.

Top appointments in Juncker’s 28-strong team include Italy’s FedericaMogherini as the EU’s High Represen-tative for Foreign Policy and SecurityPolicy, a position considered the mostinfluential after that of president-elect,the UK’s Jonathan Hill as Financial Sta-bility, Financial Services and CapitalMarkets Union Commissioner, France’sPierre Moscovici as Economic and Fi-nancial Affairs, Taxation and CustomsUnion Commissioner, Ireland’s PhilHogan as Agriculture and Rural Devel-opment Commissioner, Denmark’s Mar-garethe Vestager as Competition Com-missioner and Slovenia’s PM Alenka Bra-tusek as Vice-President for Energy Union.

The Commission has to prove that itcan change, commented Juncker in theofficial announcement. “After years ofeconomic hardship and often painfulreforms, Europeans expect a performingeconomy, sustainable jobs, more socialprotection, safer borders, energy securityand digital opportunities (…). Today Iam presenting the team that will putEurope back on the path to jobs andgrowth. I have given portfolios to people– not to countries,” he added.

The proposed team includes five for-mer PMs, four deputy PMs, 19 formerministers, seven returning commission-ers and eight former MEPs. Nine of thenew 28-member lineup are women, atarget set by president-elect Juncker. ∫

Simona Bazavan

Corina Cretu

Cautious private equity lookingat Romania over Ukraine woes

for Ukraine and a lot of good things thatwere happening in Ukraine unfortu-nately have to leave from there for othermarkets. They are heading towardsPoland, the Czech Republic and Roma-nia. Inevitably some good things willcome to Romania,” predicted RaduGeorgescu, founding partner of GECADGroup, who is a prolific investor in thetech sector.

The EVCA report found that Ukrainewas able to attract only EUR 19 millionin fresh PE investments, while exitsamounted to EUR 106 million.

Cristian Nacu, partner at Poland-

based private equity fund Enterprise In-vestors, said it was still too early togauge investors’ appetite for new fundsin CEE. “The test will take place whenthe procedures for raising new fundsstart. In the meantime, the existingfunds in CEE will have been invested,”Nacu told BR.

The changes triggered by the Ukrain-ian conflict could spur investments inmarkets perceived as more stable, suchas Romania in the regional context,commented Pop of EY Romania.

“New private equity constructionshave a significant maturity period, so

we are not expecting a strong impact,but funds that were already targetingthe region will find Romania a more in-teresting market and we can already saythere are positive effects in this direc-tion,” Pop told BR.

Sectors that could be attractive forPE include infrastructure, energy, agri-culture and real estate, according toNadia Badea, partner at law firm Clif-ford Chance Badea. Badea cited a reportby the law firm that showed that so-called PE “dry powder” (cash reserves)is at near-record levels and likely todrive future activity.

“While the US market is acceleratingand Europe’s PE activity remains sub-dued, we are seeing an increasing focuson southern Europe opportunities,”Badea told BR. She suggested the PE in-dustry was more cautious today, due toa combination of factors including thefallout of the financial crisis and the cur-rent geopolitical context.

The Ukrainian conflict has alsoclaimed its first victim in the private eq-uity sector, with three former GoldmanSachs bankers cancelling a USD 2 billioninvestment venture that targeted theRussian market, reported business dailyFinancial Times (FT) earlier in Septem-ber. The paper cited sources who saidthat DMC Partners had abandoned ef-forts to raise funds this summer due tothe worsening situation along theUkraine-Russia border. The fund wassupposed to invest the money in fast-growing companies in emerging mar-kets, including Russia, Africa, Turkey

∫ OVIDIU POSIRCA

Active deals involving PE in Romaniaaccelerated in the first months of thisyear, according to Cornelia Bumbacea,partner of deals at professional servicesfirm PwC Romania.

Taking into account only publiclydisclosed data, the total aggregatedvalue of mergers & acquisitions (M&A)in Romania exceeded EUR 100 millionthis year, according to Bumbacea.

“On average, a private equity fundcloses two or three deals per year. How-ever, in the aftermath of the economiccrisis many funds have adjusted theirinvestment strategy. One important as-pect of this re-adjustment is the invest-ment threshold,” Bumbacea told BR.

“Some private equity funds are now looking only at large deals at European level, while others have adjusted to smaller-scale deals, in line with the new market realities. Ne-gotiations with local entrepreneurs usu-ally take longer than expected, withsome transactions failing to materialize,for various reasons,” she added.

With more companies in PE funds’portfolios set to reach maturity in thecoming period, M&A activity in this sec-tor should pick up, especially in 2015,suggested the PwC Romania partner.She said these firms could be targetedby other industry players or even byother PE funds.

Mihai Pop, manager in the transac-tions assistance department at profes-sional services firm EY Romania, addedthat, traditionally, investment funds dodeals of between EUR 5 and 50 million,something that has not changed in thepast two years.

Moving to safer ground

PE investments have accelerated in thepast two years in Romania, increasingmore than twofold year-on-year to EUR70 million in 2013, according to a reportby the European Private Equity & Ven-ture Capital Association (EVCA). Exits,meanwhile, fell to EUR 42 million lastyear from EUR 120 million in the previ-ous year.

As the conflict in eastern Ukrainegets worse and the country’s wholeeconomy is brought to the brink of col-lapse, some dealmakers are saying thatfunds could seek shelter in neighboringcountries.

“The Ukraine crisis brings bad things

CEE-based private equity (PE) funds are looking at Romania, which attracted EUR 70 million of investment lastyear, in response to the unfolding crisis in Ukraine. Dealmakers say funds remain cautious and it is still too earlyto tell if fresh investments will reach the local market.

6 FOCUS www.business-review.euBusiness Review | September 15 - 21, 2014

Cristian Nacupartner, Enterprise Investors

Nadia Badeapartner, Clifford Chance Badea

Mihai Pop, manager, transaction assistance department, EY Romania

Radu Georgescufounding partner, GECAD Group

Cornelia Bumbaceapartner, deals, PwC Romania

Courtesy of Enterprise Investors

Courtesy of C

lifford Chance B

adea

Courtesy of EY R

omania

Courtesy of G

ECAD

Group

Courtesy of P

wC

Rom

ania

FOCUS 7www.business-review.ro Business Review | September 15 - 21, 2014

“Generally, private equity funds arelooking for mature companies, with aclear and established market segment,with competent management and goodgrowth perspectives. This is why theyare more reluctant to finance start-ups,”she explained.

The report by EVCA found that in-vestments in later stage ventures in Ro-mania reached close to EUR 3 millionlast year, trailing regional championsPoland with EUR 9 million and Hungarywith EUR 8 million. Ventures in thesecountries also provided seed and start-up financing, while in Romania therewas none, according to the report.

“Out of the investment funds presentin Romania, there are some that prefer(e.n. to invest) in the early stage – not aspart of seed/start-up, but in businessesthat have already been tested before thefirst accelerated growth,” said Pop of EY.

Nacu of EI added that seed and start-up financing is limited because such

funds are almost nonexistent in thecountry.

ovidiu.posirca@business-review.ro

and Asia.The European Bank for Reconstruc-

tion and Development (EBRD) an-nounced this summer that it wasstopping new investments in Russia.The lender was a traditional backer ofearly private equity funds in the country,according to the FT.

Fewer venture capital projectsAlthough PE usually makes invest-ments starting at USD 50 million, ven-ture capital funds can start at USD 2-5million, commented Georgescu, whenasked why financing in the seed andstart-up phases of Romanian enter-prises is limited.

Private equity funds have been in-volved in some local venture capitalprojects, mostly in the Romanian IT sec-tor, according to Bumbacea of PwC Ro-mania.

Private equity activity in Romania and Ukraine (EUR mln)

Romania/Ukraine Romania/Ukraine Investments Exits

2008 294 354 52 5

2009 221 38 12 9

2010 119 96 23 88

2011 66 63 31 2

2012 28 43 120 20

2013 70 19 42 106

Source: Central and Eastern Europe Statistics 2013 special paper published by EVCA

Private equity/venture capital investments in Romaniaand Ukraine in 2013 (EUR mln)

Romania/Ukraine

Later-stage venture 2.9 0Growth 9.8 11.4Replacement capital 9.4 0Buyout 47.8 7.5Total 70 19Source: Central and Eastern Europe Statistics 2013 special paper published

by EVCA

“New private equityconstructions have asignificant maturityperiod, so we are notexpecting a strong im-pact, but funds thatwere already target-ing the region will findRomania a more inter-esting market and wecan already say thereare positive effects inthis direction,”Mihai Pop, manager in the transactions assistance departmentat professional servicesfirm EY Romania

8 PROPERTY www.business-review.euBusiness Review | September 15 - 21, 2014

Asking prices forBucharest homes up by 2 pct in August, saysImobiliare.ro The average asking price of apartmentsin Bucharest was EUR 1,076/sqm at theend of August, up by 2.1 percent y-o-y,according to data from online real estateplatform Imobiliare.ro. Prices were un-changed against the previous month.The average asking price of old flats(those built before 1990) stood at EUR1,013/sqm at the end of August (up by1.3 percent y-o-y) while newly builtapartments were put on the market atan average of EUR 1,178/sqm (up by 0.4percent y-o-y).

SPDI buys 122 Bucharestapartments for EUR 3.3 mlnSecure Property Development & Invest-ment (SPDI), a property developmentand investment company incorporatedin Cyprus, has paid EUR 3.3 million for122 apartments in Bucharest, the firm’sthird investment in Romania this year.The flats cover approximately 11,700sqm and are located in four separateresidential complexes in different areasof the capital. Out of the 122 apartments,87 are rented and are estimated to gen-erate a net operating income of approx-imately EUR 270,000, according to thecompany. The transaction involves anexchange of assets for shares.

AFI Europe gets EUR 32mln loan from BCR for AFIPark 2 and 3Real estate investment and developmentcompany AFI Europe has taken out aloan of EUR 32 million from Banca Com-erciala Romana (BCR) to finance the com-pletion of the second and third buildingsof its 65,000 sqm AFI Park office projectin Bucharest. Out of the sum, EUR 17million represents an investment loanfor AFI Park 2 and the remaining EUR 15million is a development loan for AFIPark 3. The developer delivered the sec-ond building of AFI Park in April and thethird will be completed in December.

Construction companyTehnologica Radion enters insolvencyTehnologica Radion, one of Romania’sbiggest construction companies, has en-tered insolvency at its own request, ac-cording to Mediafax newswire. The firsthearing in the case will take place onSeptember 15. The firm, which specializesin road, bridge, tramway and hydrotech-nical construction, is owned by local busi-nessman Theodor Berna, who is currentlyunder arrest on tax evasion and money-laundering charges in a case with damagesestimated at over EUR 100 million. Pros-ecutors have previously sought the seizureof the company’s assets and accounts.Tehnologica Radion reported a turnoverof approximately EUR 80 million and aEUR 900,000 net profit in 2013.

BRIEFS Prodplast Imobiliare begins workson EUR 60 mln shopping mall in Obor

∫ SIMONA BAZAVAN

Veranda shopping mall will require aninvestment of EUR 60 million, with themoney coming from Prodplast’s ownfunds, but also from a bank loan forwhich “negotiations are in an advancedstage”, said Andrei Pogonaru, memberof the board of administration of Prod-plast Imobiliare and the son of FlorinPogonaru.

The mall is being built on thegrounds of the former Prodplast plasticsfactory, which has been relocated. It issituated in the Obor neighborhood ofBucharest, one of the capital’s tradi-tional commercial areas, right next tothe Obor farmers’ market. Some 20,000people are expected to come here eachday to do their shopping. Veranda isbeing branded as the first green andproximity mall in the city and is meantto be complementary to the existing tra-ditional retailers in the area, stressedPogonaru.

“We’re bringing a new model of shop-

ping center which has been successfullytested in other European capitals suchas Prague and Paris. We want to servethe people living near Obor market,while at the same time we are the clos-est shopping mall to downtown,” hesaid. Prodplast Imobiliare estimatesthat the project has a primary catch-ment area of approximately 166,000households or about 430,000 people.All in all, some 8 million visitors are ex-

pected in the first year.With a gross leasable area (GLA) of

25,000 sqm available on two floors, Ve-randa will have 1,200 parking placesand feature 15,000 sqm of green space.Depending on the mall’s performance,it could be extended with additionalspace in the future, said Pogonaru.

Out of the total GLA, 10,000 sqm hasalready been leased by Carrefour, themall’s anchor tenant, which will openits 11th Bucharest hypermarket there.The remaining 15,000 sqm will be di-vided into approximately 100 stores forwhich leasing contracts have alreadybeen signed for periods of up to 30 years,said the businessman. The developerestimates that over the coming period,half of the remaining space will beleased as well.

CBRE Romania is the exclusive leas-ing agent for the project.

Prodplast Imobiliare was created in2008 when it broke off from local plas-tics manufacturer Prodplast.

simona.bazavan@business-review.ro

The 25,000 sqm shopping mall that Prodplast Imobiliare, controlled by Romanianbusinessman Florin Pogonaru, is developing in the Obor area of Bucharest will becompleted in 2016 and is expected to generate between EUR 6 million and EUR 7million of rental income in the first year, the company has announced.

Praktiker starts expansion under new ownership

∫ SIMONA BAZAVAN

The new store that DIY retailer Praktikeropened last week in Targu-Jiu, southernRomania, is the first addition to the net-work since 2010. It has a sales area of ap-proximately 4,000 sqm, a smallersurface than the around 7,000 sqm av-erage of the other 27 Praktiker outlets,and required an investment of approxi-mately EUR 1.5 million, according to thecompany.

Praktiker’s expansion will continuewith the addition of a shop in Giurgiu,Susli told BR in an interview in July.

The businessman, who controls sev-eral other companies active in the con-struction field, took over the 27Praktiker branches in Romania this Feb-ruary from the insolvent Praktiker AG.

Results following the takeover havebeen positive, and after five consecutiveyears of falling sales in Romania, thelocal Praktiker network is on course torecover its losses by the end of 2014,said the new owner, attributing this to

changes to the retailer’s strategy. Theseinclude the introduction of new prod-ucts and product categories and cus-tomized offers and price cuts for loyalcustomers. “The new Praktiker will bea customer-driven store. Right now cus-tomers want a good price-quality ratio,”said the businessman. The entire repo-sitioning campaign should start bearingresults by yearend, Susli predicts.

Recently, the company announcedan operating profit of RON 12 million(approximately EUR 2.7 million) andthat it plans to open 18 stores over thenext two years, according to Mediafax.

The German retailer has been pres-ent in Romania since 2002 and saw itssales peak at EUR 292.4 million in 2008with a network of 25 outlets. As marketconditions worsened and competitionincreased over the following years,Praktiker saw sales drop and losses in-crease. Last year, the firm reported salesof approximately EUR 130 million, lessthan half the level posted in 2008, anda EUR 16.3 million net loss.

The local DIY market has beenthrough major changes over the pastcouple of years. OBI closed its localstores and bauMax sold its network toFrench Adeo earlier this year. Last year,Kingfisher, the biggest European homeimprovement retailer, bought the 15local Bricostore branches from Frenchcompany Bresson.

simona.bazavan@business-review.ro

Omer Susli, the businessman who took over insolvent Praktiker AG’s local networkin February, has invested EUR 1.5 million in opening a store in Targu-Jiu, the network’s 28th branch and the first to be inaugurated under the new ownership.

Omer Susli, owner of Praktiker

Anca Damour, director of CarrefourProperty, Neculai Ontanu, mayor ofdistrict 2, and Andrei Pogonaru,board member at Prodplast Imobiliare

PROPERTY 9www.business-review.eu Business Review | September 15 - 21, 2014

Adama completes Iasiresidential project following EUR 1.7 mln investmentReal estate developer Adama has de-livered the last development phase ofCopou Bellevue, its residential projectin Iasi, eastern Romania. The schemeconsists of a five-storey block with 50apartments which required a EUR 1.7million investment. The money camefrom Adama’s own funds. Some 75 per-cent of the flats have been sold sinceMarch, according to the real estate de-veloper. The finished Copou Bellevueproject comprises four blocks with 170apartments.

Flanco rents 5,000 sqm inH. Essers logistics centernear BucharestIT retailer Flanco has rented a surfaceof 5,000 sqm in the H. Essers logisticscenter near Bucharest, in order to reducetime wasted supplying its stores, thecompany announced last week. Flancowill use the new space to deposit 1.6million cubic meters of products everyyear. The center is owned by Belgiancompany H.Essers which has developedlogistics space covering a total of 30,000sqm close to the A1 highway.

BRIEFSAnchor Grup plans to resume work on Metropol office project

∫ SIMONA BAZAVAN

The Metropol office project inBucharest was supposed to be deliveredin the second half of 2009, but works onthe site were brought to a halt when thecrisis started. More than five years later,the developer is planning to resumeworks.

“We recently met with the board andin autumn we will start – or we are ex-pecting to start – the 35,000 sqm officebuilding. We have already begun to talkto international players,” said YurdaerKahraman, global CEO for commercialreal estate properties at Fiba Holding,last week, adding that more informa-tion will be made public in the comingweeks. Metropol is located in westBucharest, close to the Plaza Romaniashopping mall and the Anchor Plaza of-fice project, also developed by AnchorGrup.

In the meantime, the developer isgoing ahead with the renovation of its

two local malls, Bucuresti Mall andPlaza Romania. Works started in Maythis year and are on schedule to be com-pleted in 18 months, said Kahraman.The entire budget for the two malls isEUR 26 million, 60 percent of which willgo to Bucuresti Mall, which is presentlymore than 85 percent occupied.

At Plaza Romania, the refurbish-ment process will also include turning8,000 sqm of the mall’s surface area intooffice space. When works are com-

pleted, the mall will cover 40,000 sqm.Plaza Romania began operating in 2004,but started to lose business five yearslater when AFI Europe opened the AFIPalace Cotroceni mall in the vicinity.

Bucuresti Mall was opened in 1999,making it the first modern shoppingmall in the country. The 40,500 sqm siteis also facing more competition as twomajor shopping malls, ParkLake, devel-oped by Sonae Sierra and Caelum De-velopment, and Mega Mall, developedby NEPI, will be delivered in the samepart of Bucharest over the next coupleof years. Anchor Grup representativessaid the two malls have been reportingstable results but refused to commenton the actual numbers. Moreover,Kahraman revealed that the companywas considering investing in a new mallon the local market. “There are stilldoable locations in Bucharest,” he said,without detailing any concrete develop-ment plans.

simona.bazavan@business-review.ro

Real estate developer Anchor Grup, part of Turkish Fiba Holding, is in the processof selecting a contractor and could resume works on the 35,000 sqm Metropol office project in western Bucharest this autumn.

Yurdaer Kahraman, Fiba Holding

10 INTERVIEW www.business-review.euBusiness Review | September 15 - 21, 2014

How much has CEZ invested locally sinceentering Romania in 2005?The whole group has invested over EUR2 billion. One half was invested in re-newable and the other half through ac-quisition and the investment programin CEZ Distributie.

What is the latest on the litigation withElectrica?We are awaiting the final result of the ar-bitrage. All the necessary informationthat has been requested by the arbitra-tion (e.n. court) in Paris, we have deliv-ered. We have open books; from thebeginning we stated that we were long-term investors and our intention wasnot to hide any information or not tofollow the law or the regulations. Wepay attention to this, and of course webelieve that all the proofs that we sub-mitted will show that we did our invest-ment program properly. I think we arethe ones that really invested in the dis-tribution network. We are putting overRON 200 million (around EUR 45 mil-lion) annually into the network and weare going to continue.

The (arbitrage) decision will be madeby the end of this year. The Interna-tional Court of Arbitration has its owntiming and it is really hard to predict. Ofcourse, I think the best thing for every-one is to receive an answer as soon aspossible, so as to close this chapter and

really focus on the investment programand working with Distributie.

CEZ had initially said it was looking to sellits wind farm in Romania, but has nowchanged its mind. Why is that?Categorically, we are not actively seek-ing any investors because nowadays weare focusing on something else. Wewould like to really go through the no-tification process (e.n. for the farm) inBrussels (e.n. with the European Com-mission) and to complete our dialoguewith state representatives becausesome of our wind farms are in a verycomplicated situation that needs to besomehow solved. They ended up some-how between Brussels and Bucharest interms of notification of the legislation.

Under the current legislation ourwind farm needs to go through an indi-vidual notification process because itexceeds a certain threshold of install-ment capacity, so the notification needsto be done individually. It is not us butthe Romanian state that is tasked withthe notification process for the windfarm and this is ongoing and not yetcompleted.

So our primary focus now is to fixthe entire environment around thewind farm. We are focusing on improv-ing its performance, because we seethere are areas where we can do better,and in the future we would definitely

like to optimize the overall performancein terms of best practices and processesimplemented. So this is our current pri-ority.

Is the wind project profitable at the mo-ment, given the changes in the incentivesscheme?I will not tell you if the project is prof-itable or not, but the changes signifi-cantly influenced the return on thisinvestment. That is obvious. There areseveral parameters influencing this re-sult, and we expect there to be furtherchanges that will balance the whole sys-tem.

Changes in the legislation?That is the ideal solution, of course.

Can we say that the rush in the renewablesector in over?I think the peak is over, which we’re alsoseeing in our region through our distri-bution company as we are connectingseveral renewables. The era of themajor projects is definitely over.

CEZ is reportedly looking to buy Enel’soperations in Slovakia. What about theEnel assets in Romania that are also upfor sale?At the moment we are in a situationwhere we would rather consolidate ouroperations here than expand. One ofthe reasons why we are not expandingis that we need to solve the problemsaround the wind farm. This is our prior-ity and also shapes our appetite to in-vest here in Romania. We would rathermake investments in expanding ourcurrent activities so we will continuewhere we know very well that we cando better, or where we can lead on themarket, like energy efficiency – this isdefinitely the direction, but don’t ex-pect any typical acquisition transactionfrom us.

Could Romania lose new energy invest-ments because of what is happening inUkraine?I would say that instead Romania maygain some, for two reasons: first of all Istill believe this is a very attractive market, very secure, with proper au-thorities with whom we always haveopen discussions. Secondly, as a generalrule, if one of the emerging markets isclosing, the others may benefit, and Romania is one of the emerging marketswith a stable environment, so I wouldinstead say that this might be an oppor-tunity.

ovidiu.posirca@business-review.ro

∫ OVIDIU POSIRCA

Is the current backdrop in the energysector favorable to starting new invest-ments, if we take into consideration forinstance the low wholesale electricityprices?We are not planning big new acquisi-tions/investments. Regarding other in-vestments, we will definitely fulfill ourcommitments to our customers and Istrongly believe this is a long-term in-dustry so you should be very carefulabout suddenly reconsidering the in-vestment strategy. At the moment, wehave our five-year commitment toANRE in terms of the volume of invest-ments, but we are lacking on the rev-enue side because there has been a dropin consumption.

Oltenia is one of the regions heavilyaffected by this. We are seriously ana-lyzing the source of this because thereis not one reason – it’s quite complicated.

We have our own macroeconomicexperts working on it to better under-stand the performance of the economy,because that is one part of the problem.Of course, there are some partial param-eters we have already seen: there is thedrop in consumption from some bigclients, which are also facing problemson their side. We’re also seeing prob-lems like the seasonal ones. The besthope is to come up with a proper under-standing of what is happening in themacroeconomics at the end of the year,because the GDP is going up slightly, butconsumption is going down.

How do you plan to reduce losses in thedistribution segment?The losses have really been our mainpriority for the last two years. It’s defi-nitely a long-term mission and I thinknow we are, let’s say, in the third year ofour strategy focusing on the losses.What we have achieved up to now is fulland transparent control over the energybalance. Secondly, we are working withspecific parameters on the technicaland non-technical assistance to reallyunderstand the causes, and we’re tryingto identify the right areas and regions tochange our investment program, first ofall to really change the point of view re-garding technical losses and also interms of prevention and stopping com-mercial losses, because this is a very bigpart of our overall losses. So far this yearwe have had very positive results andthis is the first year we have seen a de-crease in both parameters, in the ab-solute volume of losses and also in thepercentages.

Martin Zmelik, country manager of CEZ Romania Group, part of the Czech utility firm, reckons that the era of major projects in the renewable sector is over. He says that CEZ is not ‘actively seeking’ investors for its EUR 1 billion wind farm in Dobrogea, which has been hit by changes to the incentives system. The company iscurrently looking to consolidate its local operations instead of expanding through the acquisition of new ones, revealed Zmelik.

Zmelik started working for CEZGroup in 2005 as director of in-ternational operations. He cameto Romania in 2010, worked asCOO and was promoted to coun-try manager of CEZ RomaniaGroup in July 2014. He is a grad-uate of the Management Facultywithin the University of Econom-ics in Prague and holds an MBAfrom the US Business School.

CV Martin Zmelik

CEZ sees end to local renewable rush

Photo: M

ihai Constantineanu

LINKS 11www.business-review.eu Business Review | September 15 - 21, 2014

Siveco is among a number of companies under investigation by the fiscal authoritiesfor tax evasion. Irina Socol, president of the Romanian software developer, was detained on Tuesday morning for questioning.

Local IT firm Siveco underinvestigation for tax fraud Romania to invest nearly

EUR 4 bln in IT&C by2020 Romania should invest EUR 3.9 billionto meet its IT&C targets by 2020, whichinclude growing broadband coverage,e-government use, online sales andthe number of employees in the sector,as part of the National Strategy DigitalAgenda for Romania, published by theMinistry for Information Society, ac-cording to Mediafax newswire. Thedevelopment of the broadband net-work will attract EUR 3.1 billion, whichaccounts for the bulk of the invest-ments.

Huawei plans EUR 130mln local turnoverHuawei Technologies Romania aimsto post a EUR 130 million turnoverthis year, a slight growth over 2013,when the company registered EUR127 million, according to Mediafaxnewswire. Huawei Technologies Ro-mania currently has 900 employees,of whom 700 are Romanians. Over2007-2012, the Chinese group investedEUR 90 million in its Romanian sub-sidiary. An additional EUR 6 millionwas invested in the opening of thefourth Huawei global services center,which provides technical support tocustomers in Central and Eastern Eu-rope, Scandinavia and Western coun-tries.

UPC clients can tailortheir telecom packagesCustomers of telecom operator UPCRomania now have the opportunityto customize their telecommunicationsprovision by picking the TV channels,internet and telephony services theywant in their package, after the com-pany introduced a new portfolio, whichallows for 1,000 possible combinations.UPC also announced the launch ofthe Fiber Power 500 Mbps service,which offers internet speeds of be-tween 60 Mbps and 500 Mbps, in eightRomanian cities: Bucharest, Timisoara,Cluj-Napoca, Ploiesti, Iasi, Galati, Con-stanta and Alba Iulia.

Vodafone enhances mobile data experiencewith Supernet launchTelecom operator Vodafone Romania,which had 8.5 million customers onJune 30, has launched Supernet, marking a new development in mobiledata services, which allows higher speeds, network stability andsecurity in the network for its customers. All Vodafone customerswill benefit from substantially higher speeds when surfing the internet from their smartphone. 3Gspeeds will reach 43.2 Mbps while users of 4G services will have download speeds of up to 300Mbps.

BRIEFS

Some of the firms that allegedlysupplied bogus IT services to Sivecobelong to Rroma individuals in Sin-testi who were also involved in thescrap iron businesses.

“This blow strikes directly at theheart of the IT industry. The skills ofRomanian programmers and theirtechnical abilities are among the fewdomains where we can prove ourcompetitiveness at global level. AndSiveco, the company led by Irina Socol,is the leader of the software industryin Romania,” commented GSP journal-ist Catalin Tolontan on his blog,adding that the PM, Victor Ponta,should wonder what the Romanianstate can do to avoid a repetition ofthe situation. “Isn’t the governmentworried? It is easy to blame it on indi-vidual insanity and greed but what ifthis is a modus operandi?”

Investigators seized computersand documents after searching theheadquarters of companies involvedin Bucharest, Ilfov and Giurgiu as wellas the homes of the individuals undersuspicion. Ten people have beenquestioned in the case.

The searches were carried out byofficers from the Direction for FraudInvestigation (a Romanian Police de-partment), under the coordination ofthe Prosecutor’s Office (the BucharestCourt of Appeal), as well as police offi-cers from Giurgiu and Ilfov county,with support from the Special Opera-tions Direction.

“This morning, we were required toprovide information for searches con-ducted by the authorities. The finan-cial and commercial activity of the

company has been based, for morethan two years, on respecting all thelegal national and international norms.We are fully cooperating with the au-thorities. We are also very transparentin placing at the disposal of the publicinformation regarding the ongoing in-vestigations made by the authorities,as we obtain it,” Siveco Romania offi-cials told Mediafax newswire.

One of the main IT firms in Roma-nia to have signed contracts with pub-lic institutions both in Romania andelsewhere in Europe, as well as in Asiaand Africa, Siveco has developed proj-ects in eLearning, eHealth, eCustomsand credit bureau in the United ArabEmirates, Azerbaijan, Turkey, the Re-public of Moldova, Bulgaria, Kaza-khstan, Algeria, Serbia, Saudi Arabia,Cyprus, Macedonia, Bahrain, Kuwait,Egypt, Oman, Morocco, Belgium, Lux-emburg and Belarus.

Its major local projects have in-volved the IT education system, de-veloped for the Agency of Paymentsand Interventions in Agriculture, thesingle informatics system for the Na-tional Health Insurance House, thenew computerized transit system, aneCustoms solution implemented bySiveco for the National Customs Au-thority in Romania and Turkey andthe informatization of the Credit Bu-reau in Romania.

In 2013, Siveco posted a consoli-dated turnover of EUR 65 million. Inthe first nine months of 2014, thecompany signed 15 contracts withstate institutions, with a total value ofEUR 70 million.

Its management board is made upof Irina Socol, president and generalmanager, Alexandru Radasanu, vice-president of R&D, Daniela Bichir, vice-president of HR & quality, Florin Ilia,vice-president, Aurora Crusti, deputyvice-president for the commercialcommission, Doina Binig, vice-presi-dent of strategy and chief operatingofficer, and Bogdan Ciungradi, finan-cial vice-president.

The company’s shares are split be-tween Siveco Netherlands BB, with a42.73 percent participation, Siveco In-ternational (32.91 percent), Socol (11.11percent), Radasanu (7.71 percent), Flo-rian Gabriel Ilia (2.71 percent), SivecoRomania (2.51 percent), Aurora Ecate-rina Crusti (0.13 percent) and DanielaBichir (0.13 percent).

otilia.haraga@business-review.ro

∫ OTILIA HARAGA

The president and shareholder ofSiveco Romania was held on tempo-rary arrest and grilled by prosecutorsfor several hours.

Other suspects in the case will beinvestigated but have not been de-tained, after most confessed theircrimes when they were questioned onMonday, according to Mediafax.

The official statement that thecompany sent to Business Reviewreads: “Criminal investigations andprocedures regarding a series of punc-tual activities by Siveco Romania aretargeting the president and generalmanager of the company, Irina Socol,and one of the vice-presidents of thecommercial division, Aurora Crusti.The company is cooperating fully andtransparently with the authorities re-garding any legal documents. Thecompany fully asserts its innocenceand will prove that neither Siveco,Irina Socol and Aurora Crusti norother Siveco representatives havecommitted any crime.”

It went on: “The company is notand will not be affected at operationallevel, and is being run according to pa-rameters. We will shortly detail thecontinuity plan, based on the agree-ment of the shareholders. Once more,we reaffirm the high local and interna-tional standards that we have metover time and we continue to observe.There is no obstacle in the way of re-specting all the contractual commit-ments towards the clients andsuppliers and we will remain the sametrustworthy partner based on twoyears of flawless professional service.”

As well as Siveco, several othercompanies are currently under inves-tigation by the fiscal authorities on taxevasion charges.

“To avoid the payment of taxes tothe state budget, the representativesof a company that develops IT pro-grams are suspected of creating acriminal circuit made up of over 50companies that made fictitious trans-actions worth approximately EUR 10million over 2009-2013,” said aspokesperson for the Romanian Police,quoted by Mediafax newswire.

Siveco is suspected of falsely ac-quiring services for the creation of ITprograms from various “ghost” com-panies. The programs were never de-veloped, depriving the state budget ofEUR 3 million in revenue.

Irina Socol, president, general manager and shareholder Siveco

12 FILM www.business-review.euBusiness Review | September 15 - 21, 2014

Films of the fall: local premieres line up for big screen

∫ OANA VASILIU

Director Dan Pita has managed to finishhis movie Kyra Kyralina more than 20

years after first contemplating the proj-ect. The EUR 1.5 million result, whichgoes on show from September 5, is abaroque affair, which reconstructs thelife of a 1920s dysfunctional family withimpressive interiors, costumes (OanaPaunescu) and music (Adrian Enescu).Based loosely on the plot of thehomonymous book by Panait Istrati, itis pitched as a set of interlocking narra-tives concerning a young gay man in aworld that was somewhat more liberalsexually in the latter years of the Ot-toman Empire. But the movie is in facta family story seen through the eyes ofthe young man, focusing on two femalecharacters. Kyra (Iulia Dumitru) is thelibertine mother of Dragomir (StefanIancu as a youngster and Corneliu Ulicias an adult) and Kyralina (Iulia Cirstea),and attends exotic parties with foreign-ers in an effort to find her daughter ahusband. She, however, is terrified ofher own husband, Rotarul (MirceaRusu), who beats both his wife and chil-dren. The story concentrates on thesearch for love and happiness in a worldof fear, revenge and excess.

Cripta (The Crypt), released on Sep-

tember 12, is the second feature fromCorneliu Gheorghiță. It stars Frenchactor Serge Riaboukine, winner of theBronze Leopard in Locarno for his turnin Peau d’homme cœur de bête (1999).

The Romanian movie, which premieredat the Transylvania International FilmFestival (TIFF) in June, tells the story ofLeduc, a French real estate developer,who is preparing Baile Herculane, anold Romanian thermal resort, for reno-vation. A Roman fresco in a crypt delaysthe project, so he tries to burn it down,but locks himself in a courtyard by mis-take. He stays trapped for days, as theneighborhood is deserted. Leduc thentries communicating with the few re-maining residents and degeneratesfrom a civilized being to a beast.

Gheorghe Ifrim, Adrian Văncică andMihai Călin play the main characters inRăzvan Săvescu’s new comedy, whichalso had its world premiere at TIFF thissummer. America, venim! (America,here we come), which will be in cine-

mas from September 19, tells the storyof five actors, a director, and a smallchild with a huge teddy bear, who arecrossing the ocean from Targoviste toperform in New York. To make someextra money, the actors decide to startworking with a local agent, a Romanianliving in the US. The agent promisesthem a major tour, but nothing goes ac-cording to plan.

Gheorghe Andrei’s debut independ-ent feature Planşa (It Takes Two toFence) will premiere on September 27,telling the story of Alex (Silvian Valcu),a former fencing champion, who is re-turning to the sport as a coach. WhenAnda (Olimpia Melinte) signs up forclasses, Alex becomes her trainer, buttheir professional relationship developsinto something more. This comes to theattention of Mircea (Marian Adochitei),Anda’s boyfriend, who is a member ofthe same club. The tension mountsuntil Anda is forced to choose betweenfencing and Mircea.

Kiki Vasilescu is another independ-ent director releasing his first featurefilm, Terapie pentru crima (Cuckoowith a Gun) this autumn, on October 3.The starting point for this black comedywas Luc Besson’s hit, Léon. “I wasthinking what might happen to Matildewhen she grew up, and I imagined hercoming to Romania and taking a job,until one day she quits and becomes ahit woman. From that point I wrote theindependent story of a young Roman-ian woman who wants to be a hitwoman. She starts looking for a firstcontract but soon she moves into an-other hit man’s territory,” Vasilescu toldthe publication Film New Europe. The

EUR 100,000 budget was covered bythe director himself, and the film starsClaudia Pavel, Cătălin Ciurdar, Vlad Cor-beanu, Robert Radoveanu and GeorgeConstantinescu.

Probably the most eagerly awaitedpremiere of this autumn is Q.E.D. (QuodErat Demonstrandum), directed by An-

drei Gruzsniczki and starring OfeliaPopii, Sorin Leoveanu and Florin PiersicJr., which has garnered several interna-tional awards, such as the Rome SpecialJury Prize and the Siberian GoldenTaiga International Debut Film Festi-val’s top award. The black and whitemovie focuses on a mathematician’s de-cision to publish a paper in a magazineedited by an American university with-out asking permission from the com-munist authorities. This action triggersa chain of events that will change thelives of his friends. The movie will pre-miere in Romania on October 10.

Last but not least comes Poarta Alba,

directed by Nicolae Margineanu, whocontinues the investigation of the com-munist era. He presents a feature aboutthe concentration camp at Poarta Albaand the construction of the Danube-Black Sea canal. The plot follows threestudents (Cristian Bota, Sergiu Bucurand Madalina Craiu) caught while try-ing to cross the Danube, two of whomare sent to the notorious camp.

oana.vasiliu@business-review.ro

Seven Romanian premieres will be hitting the national and international silver screens this autumn, covering arange of subjects, from well known local stories of the 20th century to contemporary comedies. What is surprising is the fact that almost half of the 20 Romanian premieres expected in 2014 are debuts or second features, with most of the films receiving support from the National Centre for Cinema.

Courtesy of K

yra Kyralina

Courtesy of Ancuta Iordachescu

Courtesy of C

ripta

Courtesy of Am

erica, venim!

Courtesy of P

oarta Alba

CITY 13www.business-review.euBusiness Review | September 15 - 21, 2014

Old City Center gets new Gabroveni Inn finally opens to public

∫ OANA VASILIU

Once upon a time…Gabroveni Inn was first mentioned inan 1818 document by Dionisie Fotinoand then again in 1822, by L. Kreuchely,Prussia’s agent in Bucharest. Accordingto the latter, at that time there wereseven large inns without a church inthe city: Filipescu, Golescu, Manuc, Pa-pazoglu, Constantin Voda, Zamfir, andGabroveni.

Although significantly smaller insize than similar edifices, GabroveniInn lived its glory days over 1825-1850,mainly due to its proximity to theshopping area of Lipscani. In 1824, itwas already listed among Bucharest’smost important inns.

Along with a change to the streetnumbering in 1887, a series of modern-ization works took place, coordinatedby architect I.I. Rosnoveanu, andGabroveni Hotel became Gabroveni-Universal Hotel. In 1911, Ruse Rusescuowned the edifice. The damage in-curred after 1967, when the firstprocess of preservation began, wors-ened after 1990, all of which made theold building, which had a structuresimilar to that of Hanul cu Tei (the Lin-den Inn) a real danger to passers-by.The edifice became a shelter for home-less people and suffered numerousfires, which led to its almost completedestruction.

preservation, consolidation and recon-struction of the building and its tradepassage, followed by the extension ofthe existing edifice with a new wing ona vacant piece of land nearby. The proj-ect also included a special approach tothe masonry, part of which was re-placed brick by brick and, where possi-ble, repaired by refilling each brick withconcrete insertions.The story is told in The Story of the Inn –Cultural Center ArCuB, a bilingual bookthat will be available in Romanian andEnglish to mark the opening of the build-ing.

oana.vasiliu@business-review.ro

Six years after the first steps in the reconstruction of the Gabroveni Inn, the inauguration date has arrived. Over September 19-21, the public is invited to theinn’s public spaces to see the results. The new-look building was conceived as amultifunctional cultural center.

The inn now hosts a theater, the visual arts, professional training, administration, and cultural and tourist information

The cost of the faceliftBy the end of 2006, the Gabroveni Innwas included on the List of HistoricalMonuments and put under the admin-istration of ArCuB, Bucharest’s culturalcenter. From 2008, the reconstruction,extension and restyling of the site waspart of a project financed by the Finan-cial Mechanism in the European Econ-omy Area, implemented by theRomanian Ministry of Cultural and Na-tional Patrimony and by the BucharestCity Hall, with a budget of EUR 5.2 mil-lion, although the official costs wereEUR 4.2 million.

The rehabilitation and extension ofthe inn included several stages: the

Courtesy of ArC

ubC

ourtesy of ArCub

The International Festivals and EventsAssociation (IFEA) Regional Conference2014 will be hosted this year atBucharest’s Center for Cultural Projects– ArCuB (an IFEA member), in its re-cently inaugurated Old Town location,Gabroveni Inn.

The program of the four-day event(September 18-21) includes conferences,seminars and master classes on topicssuch as events sponsorship, networking,partnerships with cultural institutesand event case studies.

Allan Xenius Grige, IFEA Europechairman, says the first edition of theconference was held in 1992. “Knowl-edge of sponsorship, networking, eval-uation methods, communication andprogramming is crucial as competitionfor attention and attractiveness be-tween events, cities, and countries isgrowing. I am sure that the program, aswell as the setting on the occasion of theanniversary of Bucharest and the open-ing of the Gabroveni Inn, will be quiteexciting for our delegates,” says Gringe.

The international speakers at theconference in Bucharest will includeTrevor Davis, project manager for thewinning Copenhagen and Aarhus bidsfor European Cultural Capital (2017) andthe founder of Copenhagen Interna-tional Theater (KIT), who has foundedmany high-profile, groundbreakingpublic events.

William Culver-Dodds, IFEA vice-chair, is an expert in event and festivaldevelopment. He was CEO of HarrogateInternational Festivals for 15 yearswhere he transformed the organizationfrom a stand-alone summer music fes-tival into a year-round cultural power-house with a turnover of over GBP1million and audiences in excess of100,000 annually. Culver-Dodds cre-ated the Theakstons Old Peculier CrimeWriting Festival, the world’s leading cel-ebration of crime fiction, as well as ahost of international outdoor perform-ance arts festivals and events.86-88 Lipscani St.

For more details about the conference go to: www.arcub.ro.

Anca Ionita

Internationalevents organizersmeet in Bucharest

Allen Xenius Grige

14 ART www.business-review.euBusiness Review | September 15 - 21, 2014

FOUNDING EDITOR Bill AveryPUBLISHER Anca IonitaEDITOR-IN-CHIEF Simona Fodor JOURNALISTS Otilia Haraga - seniorjournalist, Simona Bazavan, Ovidiu Posirca, Oana Vasiliu COPY EDITOR Debbie Stowe PHOTO EDITOR: Mihai ConstantineanuLAYOUT Beatric e Gheorghiu ART DIRECTOR Alexandru Oriean

EXECUTIVE DIRECTOR George MoiseSALES & EVENTS DIRECTOROana MolodoiSALES & EVENTSSales managers: Ana-Maria Nedelcu,Oana Albu, Raluca ComanescuMARKETINGAna-Maria Stanca, Ana Maria Andrei,Iulia MizganPRODUCTION Dan MitroiDISTRI BUTION Eugen Musat

PUBLISHERBloc Notes Media ADDRESSNo. 10 Italiana St., 2nd floor, ap. 3Bucharest, Romania LANDLINEEditorial: 031.040.09.32Office: 031.040.09.31EMAILSeditorial@business-review.rosales@business-review.roevents@business-review.ro

ISSN No. 1453 - 729X

Courtesy of Artm

ark

Will the state find EUR 20 mln tokeep Brancusi sculpture at home?Art lovers are wondering if PM

Victor Ponta will accept the cul-ture minister’s challenge to find

EUR 20 million to prevent The Wisdomof the Earth (Cumintenia Pamantului)by Constantin Brancusi – probably oneof the Romanian sculptor’s most im-portant works still in his homeland –going abroad. Currently in a privatecollection, the piece has been put upfor sale. At the beginning of the month,auction house Artmark organized anevent called “Showcasing Romanianavant-garde art, from Private Collectors,on exclusive display”, where the gallerydisplayed Brancusi’s sculpture along-side other works of art up for auctionlater. Artmark invited the RomanianMinistry of Culture to bid, and KelemenHunor, the minister, has called uponPM Victor Ponta to find the money tokeep the sculpture in the country. “Thissculpture The Wisdom of the Earthshould become state property if theowners are selling it. Romania shouldmake an effort,” said Hunor, quotedby Hotnews.ro newswire. “We aim toopen discussions, to form a commis-sion and, if we get a positive decisionabout buying the sculpture and theprice is right, then we must get morefunds from the budget”, added Hunor.On September 10, the government toldthe Ministry of Culture to open nego-tiations regarding the acquisition ofthe sculpture, according to Mediafax’ssources.

The Romanian state should nowexercise its right of first refusal in orderto prevent the piece from going underthe hammer, within 30 days of receiv-ing official notification, given by Art-mark on September 3.

Otherwise the work could end upin the world’s most visited modernart gallery, Tate Modern, through theefforts of Maria Rus Bojan, art criticand member of the gallery’s acquisitioncommittee. If so, it would completethe Tate’s Brancusi series, and thegallery has said that it will take theopportunity to acquire the piece. Two

private Romanian collectors are alsoin the running, Mediafax reports.

We did it once – let’s do itagainAlso present at Artmark’s event wasDoina Lemny, a researcher at the Pom-pidou Center from Paris, who, like RusBojan, believes that The Wisdom ofthe Earth must remain in the countrythrough a national pitch. The newswas picked up on by several nationalnewspapers, with the comments sec-tion indicating a widespread willing-ness from the public to donate themoney.

The campaign is not without prece-dent. In the 1880s, a national sub-scription drive was initiated to fundthe construction of the RomanianAthenaeum under the banner “Donateone leu for the Athenaeum”. Followinga positive response, in 1886 Frencharchitect Albert Galeron started workon the design of the building, and soonafter it was opened.

The story behind the sculptureThe 1907 sculpture captures the phi-losophy of Brancusi, which has itsroots in the pre-Christianity tradition.

The work depicts a woman whom crit-ics describe as very focused on herself,her face emanating a mystery thattransforms her into a universal portrait,similar to the Thinker of Hamangia.The material used is limestone crinoid,a very common rock in the Paris ofthe 1900s. Brancusi used a block ofstone from the catacombs of the city,the Savonnieres grottos, the sculptortold the first owner of the sculpture,Gheorghe Romascu, when he boughtthe piece in 1911. The work was con-fiscated by the communists in 1957and given to the Museum of Art, butthe sculpture was returned to the fam-ily after 51 years, and is currently ondisplay at Cotroceni National Museum.

Lemny added that this was a keypiece in Brancusi’s development, madesoon after the artist and his mentor,Auguste Rodin, parted ways.

“What does The Wisdom of the Earthmean? What does wisdom mean? It isthe woman’s inferiority – she is in ahumble posture to look at her innerself, to meditate. This is why this sculp-ture is essentially Romanian and shouldremain in Romania, with all the sacri-fices we could currently make,” shesaid, pointing out that other nationslike the US also hold national pitchesfor the purchase of art.

“The sculpture isn’t a bronze. It isone of the few carvings by Brancusi.Currently, in private collections world-wide there are only six works of art –in wood or stone – that can be put onthe market and sold to a private col-lection or a museum,” said AlexandruBaldea, director of Artmark.

Brancusi brings big bucksThe biggest recent transaction involv-ing one of Brancusi’s works sawMadame LR, a wooden sculpture, gofor EUR 26 million at Christie’s Parisauction house. In June 2014, Christie’ssold another of the Romanian’s works,a simple gypsum study of The Kiss, inNew York, for EUR 5.4 million. ∫

Oana Vasiliu