Page 1

Interview: With over 30 major Chinese companies already present in Romania and more showing interest in joining them, the path is paved for closer ties between the two countries, says Ori Efraim, the head of KPMG’s China practice for CEE »page 12


April 23 - 29, 2012 / VOLUME 16, NUMBER 14



E-BANKING IS GO Banks are growing their e-service portfolios to cater to the Romanian consumers eager to experiment with new technologies »page 10




US options

M&A moves

A piece of cake

Shares in Apple, Intel, Coca-Cola and Visa are now available to buy and sell on the BSE through an alternative trading system » page 4

Upcoming privatizations of minority stakes in state-owned enterprises are expected to drive up the local M&A market » page 8

Veteran venue Caffe Latte is well known for its sweet treats. So would our critic find something to savor on its extended menu? » page 12 Business Review | April 23 - 29, 2012


NEWS in brief

3Q Julien Ducarroz

ENERGY Hidroelectrica plans EUR 358 mln of investments in 2012

Ursus Breweries sold 8 percent less beer in 2011 Ursus Breweries, the local division of SABMiller and the biggest player on the Romanian beer market, has reported an 8 percent decrease in sales volume for the 2011-2012 fiscal year, which ended on March 31. The announcement comes after the beer producer saw volumes go down by 6 percent in Q4 2011. In Romania SABMiller operates production facilities in Timisoara, Cluj-Napoca, Buzau and Brasov. It also owns local producer Bere Azuga.

Cigarette smuggling remains stable at 13.4 percent The local black market for cigarettes remained constant in March at 13.4 percent of the total market, according to data from Novel Research. In January, the black market fell to 13 percent, to reach a third of the all-time high of 36.2 percent registered in January 2010. Some 27 percent of the smuggled cigarettes sold in Romania come from Ukraine, followed by the Republic of Moldova, which accounts for 26.2 percent, Serbia on 20.8 percent and dutyfree channels on 18.7 percent.

HR Jobless rate inched up to 7.4 percent in 2011, says INS The unemployment rate in Romania increased by 0.1 percent last year to 7.4 percent, according to data published by the National Statistics Institute (INS), to International Labor Organization standards. The country had 6.15 million wage-earners in 2011, including the armed forces and the informal and black labor markets. About 730,000 Romanians were out of work last year. The employment rate for people aged between 15 and 64 was 58.5 percent, but should climb to 70 percent under the Europe 2020 target agreed by Romania.

chief commercial officer business to consumer, Orange Romania Photo: Laurentiu Obae


Courtesy of Orange

Romania’s hydro power generator Hidroelectrica has included in this year’s budget investments of EUR 358 million, up 1 percent from 2011, according to Agerpres newswire. Around 60 percent of the sum (EUR 205 million) will come from Hidroelectrica’s funds, while EUR 94 million will take the form of banks loans and EUR 59 million will be derived from other sources. Hidroelectrica’s estimated revenue for 2012 is down 1.2 percent to EUR 711 million against 2011, while expenses fell by 2.6 percent year-on-year to EUR 699 million this year.

PICTURE of the week Fever pitch: football trophy to pass through Bucharest venues With Bucharest set to host the 2012 UEFA Europa League final on May 9, the competition trophy is going on display in several venues around the capital. UEFA President Michel Platini handed over the cup to Bucharest mayor Sorin Oprescu in a ceremony at the National Arena Bucharest last week. It will visit ten locations, including Piata George Enescu, Parcul Unirii, Baneasa Shopping City, Universitate underground passage and the Old Town. Other scheduled stops are the SEAT headquarters, the City Hall Registration Center, National Arena VIP Tribune and the Student Campus of the Polytechnic Institute.

MACRO World Bank may lend Romania EUR 75 mln Romania’s government last week approved through a memorandum the modernization plan for the fiscal administration (ANAF), which will be carried out through to 2016, in order to improve collection rates and reduce tax evasion. The government is currently negotiating a loan of approximately EUR 75 million with the World Bank to support the program. Restructuring the fiscal authority at a regional level and improving the quality of its employees are some of the key objectives, along with the upgrade of IT&C infrastructure. This program also aims to improve tax collection, an objective that prompted the resignation of Sorin Blejnar, ANAF president, on Tuesday.

Gov’t targets budget deficit of less than 1 percent by 2015 The government approved the Convergence Program 2012, which includes Romania’s commitment to adopt the euro in 2015, when the budgetary deficit on ESA (European System of Accounts) methodology should be 0.9 percent of GDP. The Romanian economy is poised to grow by 1.5 percent of GDP, accelerating to 3 percent next year, according to estimates from the

IMF. The convergence program puts economic growth at between 3.1 and 3.9 percent over 2013-2015.

TOURISM Portuguese budget airline TAP lands in local market Portuguese low-cost carrier TAP will operate three weekly flights between Bucharest and Lisbon from June 30, according to airline officials. Flights will depart from Lisbon on Tuesdays, Thursdays and Saturdays at 11.10 pm, arriving in Bucharest at 5.10 am. Going the opposite way they will depart on Wednesdays, Fridays and Sundays at 6 am arriving in Lisbon at 8.25 am. Fares start at EUR 183, all taxes included.

More than 25,000 tourists to flock to seaside on May 1 Over 25,000 tourists are expected to spend the May 1 holiday in one of the local seaside resorts, said Corina Martin, president of the National Association of Tourism Agencies (NATA), last week. “Last year we estimated that 20,000 tourists would go to the seaside for the May 1 holiday and it turned out to be 25,000. This year we estimate 25,000 tourists, but if the weather is good – and the forecast indicates it will be – there will be even more,” said Martin, according to Agerpres.

In April, Orange celebrated 10 years of brand presence in Romania. How much did it invest in brand promotion? Last year, we spent more than EUR 200 million. This includes advertising on TV, print and radio, calculated on the rate card. The vast majority of advertising expenses in Romania go on TV. Also, print and radio are still very powerful. Online is growing very rapidly but it is coming from nearly zero. Today in Romania, the level of online payment and purchases is still much lower than in Western Europe. Online will reach the next level in advertising when people are able to see how, after they post a banner, or buy a keyword on Google, they can translate that into online payment. More than 10 percent of our clients renew their subscription online. What unconventional channels did you use to promote the Orange brand? The Orange Romania branch is famous as a big producer of advertising. A lot of the ads you see on TV have been taken to other countries. We export advertising more than we import. Of course, other branches in the group pay to broadcast the ads in other countries, since there are copyright conditions. Unconventional campaigns include Write in the Sky (Scrie pe cer), implemented last year, which was exported to Orange Slovenia and Poland. Also, interestingly enough, Orange Romania is the biggest owner of hot air balloons in Romania. We had a local hot air balloon campaign which we exported to the Republic of Moldova. Since they are flying objects, you need to go to the Ministry of Defense to register them as flying vehicles, with license plate and insurance and everything. In Romania we have four balloons registered. How does the outlet revamping go? Today we have more than 200 Orange Store franchisees and in terms of our own Orange Shops, we revamped around 13 out of 100. We have as partners Euro GSM and Say. The main role of our own shops is not the traffic, which was pretty much stable before and after the refresh, but customer satisfaction. To measure that, every quarter we have mystery shopping – we benchmark the entire distribution network. We evaluate the full journey our clients make to get the full picture of what needs to be improved across the entire network. Business Review | April 23 - 29, 2012



Transelectrica SPO price causes controversy have fulfilled the expectation of price appreciation, it is true, but maybe it wasn’t a negative example compared to the rest of the stock exchange or the evolution of European or American stock exchanges, from the start of the offering until now,” Andrei Ciubotaru, head of brokerage at Tradeville, told BR. He added that Transelectrica’s negative price evolution cannot be attributed to domestic reasons. The floor price of RON 14.9 per share set by the government was 12.3 percent lower than the RON 17.06 at which Transelectrica shares closed on March 12, before the start of the SPO. In the year to date, shares in the grid operator tumbled 15.3 percent. Ciubotaru said the discount tool will be used by the government in the Transgaz SPO due to be carried out later this year, but will not be needed with initial public offerings (IPOs), such as Hidroelectrica or Nuclearlectrica, because demand from investors will be sufficient. He pointed to the successful IPOs of Transelectrica in 2006 and Transgaz, the natural gas transportation operator, in 2007. Transelectrica’s net profit jumped almost nine fold in 2011 to EUR 21.4 million, while turnover rose by 22 percent year-onyear to EUR 734 million. The largest shareholders in the company at end-2011 were the Ministry of Economy with a 73.6 stake and the Property Fund with 13.5 percent. ∫ Ovidiu Posirca


hares in Apple, Bank of America, Intel, Coca-Cola and Visa began trading on the Alternative Trading System (ATS) of the Bucharest Stock Exchange last Wednesday, increasing the visibility of the BSE, and bringing in transparent firms, according to officials at the launch event. Tradeville, the brokerage house, will act as market maker and provide the initial liquidity of EUR 250,000 in these shares. “Our expectation is that these brands will attract new investors. We are waiting for the market reaction. From our point of view, we brought the best ones,” said Mihaela Biciu, president of the administration board and general director of Tradeville. Trading for these stocks will be done in RON, from 4:30-6:30 pm, when trading begins on the New York Stock Exchange and NASDAQ. “We are also considering Google and Microsoft as other options and when Facebook is listed we will try to bring shares to Romania,” Andrei Ciubotaru, head of brokerage at Tradeville, told BR. It plans to list another five US firms next week, including JP Morgan and McDonald’s. Although pundits say the latest shares have increased awareness of the BSE, there are only 100,000 investors on the domestic stock exchange. “In Poland there are 1.5 million people with individual accounts, while in Romania we have only a fraction,” said the US Ambassador in Romania Mark Gitenstein. “By investing in these companies, Romanians benefit from the most rigorous and regulated system in the world, through the listing standards of the New York stock exchange (NYSE) and the US

Photo: Laurentiu Obae


he secondary public offering (SPO) of state-owned Transelectrica, the grid operator, on the Bucharest Stock Exchange (BSE) was oversubscribed and dubbed a success by public authorities and the intermediary syndicate, but some investors think otherwise. The large investor tranche, which was allotted 90 percent of the shares, was oversubscribed at 145 percent, while in the small investor tranche the remaining 10 percent was oversubscribed at 279 percent. In order to make the offer more appealing, the government set floor and ceiling prices of RON 14.9 and RON 19.2 per share. The final prices for large investors were RON 14.9 and RON 15.7 for retail investors, and the offer attracted EUR 37.7 million. “I don’t consider the Transelectrica SPO a success. It would have been a disaster if it hadn’t happened,” Dumitru Beze, president of the Association of Capital Market Investors (AIPC), told BR. “The essence of retail investors is that they can buy shares at a discount, so investors were hopeful about this SPO, but the fact that they can buy the share at 2 percent lower today in the market frustrates them,” he added. The price of Translectrica shares has been going down in the last three weeks. On March 30, shares closed at RON 15.8, and by last Friday they had lost 5.6 percent to reach RON 14.9. “The price evolution of Transelectrica immediately after the SPO may not

US companies up for trading on BSE

Ring in the new: trading of the new stocks begins Securities and Exchange Commission (SEC).”

Alternative trading The ATS was launched by the BSE in 2010, as a less bureaucratic alternative for small firms looking for financing, while at the same time accepting international firms. Daimler shares were the first traded. Shares in 15 international firms such as Adidas and E.On are now for sale in Bucharest, including the latest launched last week. The daily average turnover on the ATS was EUR 5,913 in March, involving 367 trades. The trading of shares in the US firms brought more liquidity, increasing the turnover on Wednesday to EUR 22,246. On Thursday, it rose to EUR 24,037. Coca-Cola had the largest turnover, at EUR 6,086, followed by Bank of America (EUR 5,348) and Apple (EUR 3.778), while shares in the companies rose by 0.81 percent, 1.08 percent and 1.44 percent after the first trading day on the BSE. Visa was up 0.25 with a turnover of EUR 3.281, while Intel shares fell by 1.80 on a turnover of EUR 3.217. ∫ Ovidiu Posirca


Local business performance ‘steady despite challenges’


EOs questioned in the Leadership Agility Report put together by CEO Clubs in cooperation with SARGIA Partners and Focus Bari say performance has not suffered in the difficult context of the past three years of economic recession and general instability. The premise of the research, conducted among 106 top-level executives from leading firms in Romania, national, multinational and global, was that the international recession, in combination with the expectation of recovery for the local economy, has created an unprecedented situation for locally-based businesses and executives. The research examined business agility, both at personal and corporate level. The definition coined by Bill Joiner, co-author of Leadership Agility, was used: “the ability to lead effectively when rapid change and uncertainty are the norm and when success requires consideration of multiple views and priorities”. The research found that main key indexes on performance, compared to the past five years, are positive (ranked about the same, significantly better or at an all-time high). Customer satisfaction

is the same, significantly better or at an all-time high, market share is the same or better (91 percent), as is revenue growth (79 percent). Respondents in the survey identified as the most serious challenges for the next three years price competition (52 percent of responses), rising customer demands (49 percent), pressure to be the first to market or innovate (49 percent) and pressure to drive down operating costs (42 percent). A second tier of challenges, scoring between 18 percent and 25 percent are management of supply chain and operational complexity, the commoditization of products and difficulty to access capital for growth. Other issues are those related to infrastructure and productivity: difficulty in increasing productivity and compliance and regulation, as well as “bureaucracy and chaos in legislation” and “getting used to work under continuous change”. Only profitability lags behind with 28 percent of respondents ticking “all-time low” or “significantly worse”, while 18 percent said “about the same”. Still, 6 percent of respondents replied with “alltime high.” ∫ Business Review | April 23 - 29, 2012


Brownfield developments still waiting for green light Legal uncertainties and costly clean-up procedures have so far prevented a boom in brownfield redevelopments in Romania by discouraging investors, who continue to prefer greenfield projects. However, the situation could well change in the not too distant future and investors’ interest in the abundance of local derelict industrial sites will pick up, should the authorities address related issues, pundits told BR. ∫ SIMONA BAZAVAN Romania’s rapid industrialization before 1989 and the subsequent shut-down of many of its industrial facilities left behind a great number of derelict contaminated properties after the Revolution. Many of them are located within city limits, making them a hazard to the environment and public safety, but also an excellent investment opportunity for brownfield developments. According to the US definition, the term “brownfield site” means real property, the expansion, redevelopment or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant or contaminant. In Europe, however, there is a lack of a common definition, Perry Zizzi, partner at Clifford Chance Badea, told BR. “In general, the Romanian legal framework used for dealing with brownfields is the general ‘contaminated site’ regime, although it does not really cover the particular complexities of brownfield redevelopment,” he said. Legal uncertainties and costly cleanup procedures have so far prevented a boom in this sector. “I would not say there is particular interest in such sites, and that is the problem. We need to encourage brownfield redevelopments in order both to preserve undeveloped sites and thereby reduce urban sprawl, and to clean up sites that could damage the public’s health and blight our communities,” he added. Randy Tharp, managing director of Epstein Architecture & Engineering, agrees that there is not much interest in brownfield developments in Romania, mainly due to vague and sometimes even contradictory laws. Further disincentives are the lack of financing sources and governmental incentives at both state and local level, the overall economic conditions and lack of know-how in dealing with the assessment, monitoring and clean-up of contaminated brownfield sites containing hazardous materials. Furthermore, the authorities are just beginning to put together a national inventory of these properties. Should these issues be addressed, the investors’ interest will duly pick up. “While we have not seen much increase in activity in this area in Romania, in the past we have seen increased demand once regulations and often incentives were put in place in other cities. Models for brownfield development, including the role of local and national governments, are plentiful in Western Europe and the US, where brownfield redevelopment has become more com-

Site for sore eyes: derelict properties could prove lucrative investment opportunities under the right circumstances, say pundits mon and desirable for developers,” said Tharp. In his opinion, urban brownfield sites can often be very attractive to developers and investors. Their location, access to existing infrastructure/transportation and utilities, and sometimes lower land prices are the main advantages. And while the higher costs of cleaning up such sites can make greenfield developments more cost effective, this isn’t necessarily a rule. “With incentive programs such as expedited permitting, low- or no-cost land purchase, and/or clean-up assistance grants, the total cost to a developer can often be even less than it would be for a greenfield development,” Tharp said. However, demand is low not only for contaminated industrial sites. “Lately there has been demand for industrial land/buildings, but only on the retail segment and only for very well positioned properties. Their main advantages are proximity to crowded urban areas, access to boulevards with heavy traffic and clear legal status – or one that

can be cleared up,” Cristian Raducea, retail consultant with DTZ Echinox, told BR.

How many brownfield sites are there, anyway? So far, the state has done little or nothing to encourage brownfield initiatives, although there are plenty of such properties countrywide. How many, exactly, is very difficult to say even for the authorities. The contamination degree of these sites is another unknown in the equation. “We have to recognize that at this moment we don’t have a concrete overview of all the contamination in Romania. We have identified the problem and of course we are trying to remedy it,” said Ionut Georgescu, head of the department of waste management and hazardous substances at the Ministry of Environment, during the Brownfield Redevelopment in Romania seminar organized by the US Embassy earlier this month. According to data available so far there are some 900,000 hectares of contaminated land in the country, 75 percent of which is farmland.

According to Georgescu, however, in three years’ time Romania should have a national database with all the brownfield sites on its territory, as the ministry is currently undergoing a tender as part of a EUR 30 million project for the historical investigation and assessment of contaminated sites. “Our aim is to have a DDay for our data. We want to understand the current situation in the field, who has been responsible over time for the pollution and also to protect the state budget from remediation requests for historical contamination,” he said. In his opinion, the government will have to spend between EUR 5 billion and EUR 20 billion over the next 20 to 25 years in order to fulfill Romania’s obligations regarding land quality and site remediation. Daniel Anghel, partner for indirect taxes at PwC, reckons that over the next 30 years the government must find an estimated EUR 14 billion from different financing sources in order to restore the estimated existing 547,083 properties countrywide. Business Review | April 23 - 29, 2012


Investors browned off with legal framework

Courtesy of Epstein Architecture&Engineering

Courtesy of Clifford Chance Badea

The costs of cleaning up contaminated derelict sites can be burdensome and in many cases are hard to estimate from the beginning due to the lack of information about the properties. Furthermore, there are contradictions over the financial liability, said Zizzi. While GD1403/2007 stipulates that clean-up costs are to be borne by the entity that generated the pollution, GD1408/2007 specifies that the current holder of the plot of land in question is responsible financially for both historical and current pollution. Moreover, under GD1403/2007, plots of land neighboring the contaminated site which have been affected by the pollution are also the financial responsibility of the entity that generated the pollution on the original site, he added. Looking at environmental liability, GEO no. 68/2007 sets forth the general principle that the “polluter pays” but is unclear about the situations when the polluter can’t be identified. Also, the exact extent of the liability is further clouded by uncertainty, because of the unknown degree of contamination, in the absence of a contamination assessment studies database, the lawyer noted. And the confusion doesn’t stop here. While land owners cleaning up polluted plots are exempt from paying land tax on the site being treated for the duration of the clean-up period, according to the Romanian Fiscal Code, the law is once again unclear about how the plot of land being cleaned or how the clean-up duration is determined. “Furthermore, this exemp-

Perry Zizzi, partner at Clifford Chance Badea

Randy Tharp, managing director of Epstein Architecture & Engineering

tion alone is not sufficient to offset the clean-up costs and efforts required by the cleanup procedure,” he added. Central and local administrations have done a sloppy job applying for EU funds from the Sector Operational Program (SOP) Environment, with an absorption rate of only about 3.4 percent to date out of EUR 4.5 billion for the 2007-2013 period. Out of this entire sum, EUR 1.2 billion was available until 2011 for the development of integrated management systems for the waste and restoration of historically polluted sites, but the absorption rate is only 8.32 percent, according to official data. The situation is similar in the case of the European and government funding schemes targeted at public authorities. But cleaning up brownfield sites

should not be the government’s job alone, thinks Zizzi. Offering creative financial tools and partnerships as well as the right tax incentives to the private sector to persuade it to step in and do the cleaning could prove a better solution in the case of many sites that hold potential economic value. Tax abatement and accelerated depreciation are the most attractive incentives for developers and the government should understand this by looking at the bigger picture and not only at short-term tax collection targets, urged Zizzi. Such tax incentives could be VAT exemption for goods and services needed for decontamination, deduction for profit tax purposes of the cost of decontamination, profit tax exemption, reduced local

taxes or the VAT reverse charge mechanism, suggested Anghel. Other incentives include fast-track permitting and limitations on environmental liability. “Elsewhere, state aid in the form of grants and low-interest loans can be attractive. However, given the challenges inherent in accessing such funds here, I don’t think those should be a priority. My sense is that brownfield redevelopment can work most efficiently in Romania if it is led by the private sector with adequate policy support from the state,” concluded Zizzi. The authorities say they want to remedy the situation and for the 2014-2020 financial allocation for SOP environment to make more funds available for private companies and not only public authorities, as has been the case so far for certain clean-up projects. Meanwhile, a first draft of the government’s National Contaminated Sites Management Strategy, which has been prepared by the National Environmental Protection Agency but not yet by the government, promises to bring some clarity to the legal framework concerning contaminated sites. The draft includes definitions of the historically contaminated area concept and that of a potentially historically contaminated area. It also makes recommendations on financial liability in connection with investigation and remediation of contamination and stipulates fines for holders of potentially contaminated plots of land that don’t report relevant data about their site to the Environmental Protection Agency. Business Review | April 23 - 29, 2012


Local M&A mar stable course t

After spending 2011 in the red, shrinking 25 percent to EUR 1.26 billio pected to grow this year if the upcoming privatizations of minority sta ed representatives of law firm CMS Cameron McKenna. ∫ OVIDIU POSIRCA The local M&A market saw 162 deals last year, down from 2010 when the 223 deals amounted to EUR 1.68 billion, according to the Emerging Europe: M&A Report 2011 drawn up by European law firm CMS and DealWatch, a provider of emerging M&A data. John Fitzpatrick, partner and co-head of the corporate department at CMS Romania, said there had been a lot of protracted deals in 2011, pointing to a high risk of signature or financial closure not being reached. Furthermore, the euro zone crisis will loom over Europe and deal activity this year. However, there is a positive side to this. “The crisis has recalibrated the prices. Sellers’ asking prices were astronomical,” says Fitzpatrick. The number of M&A deals in eight emerging Europe countries rose by 12 percent last year to 3,800 transactions, amounting to EUR 150 billion, which is a 0.8 percent yearly increase, according to DealWatch. However, the average transaction size fell by 10 percent last year, while the number of deals over EUR 1 billion dropped to 24 from 34 in 2010. Manufacturing was the most active sector with 753 deals, making up almost 20 percent of all transactions, but mining, which includes oil and gas, was the leading sector in terms of deal value with over EUR 48 billion, accounting for almost one third of the overall market. The emerging countries included in the report are Bulgaria, Czech Republic, Hungary, Poland, Romania, Russia, Slovakia and Ukraine.

Stable deal-making in Romania The most targeted sectors for deals in 2011 were manufacturing, energy, agriculture, technology, media and telecommunications, and real estate, and the situation will remain generally similar this year, according to the M&A report. Horea Popescu, partner and co-head of the corporate department at CMS Romania, said manufacturing had played a significant role in the M&A market last year, and that the listing of SOEs would support growth this year. “If two or three of the state deals are successful we will exceed the average of last year. If not, it will be similar to last year,” predicts Popescu. The Romanian government has already completed a successful privatization this year, selling a 15 percent stake in grid operator Transelectrica on the Bucharest Stock Exchange (BSE) in March. The secondary public offering was oversubscribed in the large investor tranche, reaching 145 percent, while in the small investor seg-

Seal the deal: the M&A market could bounce back after ment it soared to 279 percent. Around EUR 37.7 million was obtained from the move and the Ministry of Economy, majority shareholder in the grid operator, described it as an important step in the privatization program. The Ministry of Economy, through the Office of State Ownership and Privatization in Industry (OPSPI), will organize initial public offerings for Hidroelectrica, Romania’s largest hydropower generator, and Nuclearelectrica, the nuclear energy generator, each issuing a 10 percent slice of new shares from the share capital. Romgaz, Romania’s largest gas producer, will also float a 15 percent stake on the BSE through an IPO. Meanwhile, a 15 percent stake in Transgaz, the natural gas transportation company, will be up for sale in an SPO. Energy transporters Transelectrica and Transgaz were listed on the BSE in 2006 and 2007. Popescu said there was still enthusiasm on the Romanian M&A market, but the economic uncertainties in the EU and domestic political conflict may dent growth. The report stated that although privatizations across the region are waning, Romania is pursuing a massive privatization program, agreed under a EUR 5 billion stand-by agreement made with the IMF, World Bank and European Commission. This March, Roman Copper Corp, a Business Review | April 23 - 29, 2012


arket on e this year

6 billion, Romanian’s mergers and acquisitions (M&A) market is exty stakes in state-owned enterprises (SOEs) are successful, predict-


“After the dust settled…” The first 8 conclusions for the Romanian Renewable Energy market The first law for the Romanian Renewable Energy market was published in 2008. There were some serious investments that followed, but not many. As we all know, the real kick-start for the Ilias Papageorgiadis market was the new law passed by the Romanian Parliament in the autumn of 2011, once it was approved by the European Commission earlier that summer. As it always happens, in the first period “a lot of dust was created”. Too many stories, noises, proposals and approaches became part of our daily life, in which “everyone talks to everyone about everything”. Having been present in 9 transactions for important Green Energy projects during the last 6 months, I have reached a few conclusions regarding this market. Let’s discuss them together:

ck after a tough 2011, predicts CMS Cameron McKenna

company controlled by Toronto-based investment boutique Bayfront Capital Partners, fully acquired state-owned mining company Cupru Min in an open-cry auction for EUR 200.7 million, from a starting price of EUR 57.4 million. Cupru Min owns Rosia Poieni mine, with a copper deposit of around 1 billion tons. State-owned chemical producer Oltchim, the Romanian postal service, the railway freight company CFR Marfa and the national airline Tarom will also be up for sale.

Neighboring markets

2. The majority of banks remain defensive There are many international problems that force Romanian banks to be defensive towards any investment. The Romanian subvention scheme is a local factor as well, due to the lack of stable pricing. There are indeed some projects that are financed, but I am expecting news in the second part of the year (and most probably in the last quarter). 3. PPA contracts are not easy to sign Almost everyone is searching for them but very few will finally sign them. These will be the winners of the Romanian Green Energy race, especially if they construct in the following 18 – 24 months frame.

5. Nothing moves fast. Everything is triple-checked All the big players verify the projects down to their last details. They… triple check everything and this is a good sign for the future of the segment. There might be a problem with the private individuals investing, who tend to avoid “too many expenses in procedures” and prefer “fast and cheap solutions”. (And when you hear “fast and cheap” you know what will come in a few years’ time: cries and accusations…) 6. Serious players really make deals. They don’t just talk Many important companies are active on the market, securing projects, having a target to reach by the end of the year and another one for 2013. This is the only segment of the Romanian market where you can find so much money available with the intention of investing the capital in the very near future. 7. Too many private investors focus only on price, not quality The experience accumulated by other markets tells us that the cheapest price brings us the lowest yields usually, the biggest problems and all kinds of unexpected trouble. Still there are too many private investors who focus only on price, ready to deal with people they might never see again. But the quality they will use in their investment will determine its success as well. 8. 2 more years. Maximum 3. This market will not be open forever. Tens of projects of thousands of MW will be signed this year. If one does not move fast, he might be in for a surprise. On the other hand, there are still some segments which remain unexploited. But these I will share with you in private… What is your opinion?

Ilias Papageorgiadis CEO More Real Estate Services


Romania’s neighbors, and fellow EU members, Bulgaria and Hungary were also active in the M&A market last year. Bulgaria notched up 120 transactions, amounting to EUR 1.2 billion, up 62 percent in volume from 2010 when only 95 were sealed. Meanwhile, the Hungarian market soared 160 percent to EUR 3.93 billion in 2011, closing 137 transactions against 171 in 2010. Most of the largest deals signed in Romania last year were in the finance and insurance sectors, which reached around EUR 700 million. This includes Austrian Erste Group Bank’s minority stake purchase (30.12 percent) in Banca Comerciala Romana (BCR), estimated to have reached EUR 514 million, making it the largest deal last year. Meanwhile a small proportion of transactions came in wholesale and retail

trade, services and construction. In Bulgaria, the largest transaction last year was the acquisition of Maritsa 3 Thermal Power Plan by US independent power producer CountourGlobal for EUR 230 million. Deals worth a total of EUR 439 million were made in manufacturing, while utilities accounted for EUR 406 million. West of Romania, in Hungary, the largest transaction was the minority stake purchase (21.2 percent) made by the Hungarian government in oil and gas producer MOL, for EUR 1.8 billion. Top deals in manufacturing reached EUR 863 million. Deals were also closed in the food and beverage sector, in transportation and warehousing, as well as education and healthcare. Poland outperformed other EU members in the region, sealing 516 deals amounting to EUR 17.5 billion, although this was a 16 percent fall against 2010. The largest deal was the acquisition of the mobile telephone operator Polkomtel by the Polish billionaire Zygmunt Solorz-Zak for EUR 4.8 billion. Privatizations of minority-stakes in utilities and mining companies were carried out through the Warsaw Stock Exchange, amounting to EUR 2.4 billion, while other deals were closed in telecom & IT, manufacturing and wholesale and retail trade.

1. There is an inflation of projects available, but not many really good ones In the beginning there were few available projects. Now tens of wind and solar projects are available on the market. Rumors have it that hundreds of others are under preparation. But just a small fragment of them are still good after a “predue diligence” process as we conduct. Sooner or later prices will start correcting themselves. Expectations are already lower compared to 2011.

4. The majority of investors need financing There are very few investors who depend on their own capital. A minority has secured funds from abroad, while the majority is searching on the local market. With banks being defensive and PPA contracts representing a challenge, there is no surprise that most of the investors who need financing will have to revise their strategy later this year. Business Review | April 23 - 29, 2012


Lenders capitalize on e-banking potential High numbers of Romanians are eager to use new technologies and adapt rapidly to the latest trends on the international market. Specialists duly expect mobile banking to gain in importance, driven in part by the increase in smartphone sales. ∫ ANDA SEBESI Despite the increased uptake of online financial services at international level, Romania has one of the lowest penetration rates of internet banking services in CEE – 4 percent, compared with 42 percent in the Czech Republic, 34 percent in Austria and 13 percent in Croatia, according to a study conducted by GfK last year. Researchers found that only Bulgaria lags behind, on 2 percent. Out of 4.5 activities conducted online, 4.2 come under the category of information, communication and entertainment, while few users access the internet for transactions, the same study revealed. Only 4 percent of the 9.6 million Romanians who use banks check their account through internet banking while 3 percent make transactions online. Another 3 percent (compared with 9 percent in Austria) make online payments with cards while 1.6 percent (against 29 percent in Austria) use a mobile phone to do so. The same study found that only 3 percent have bought a financial service through internet. But e-banking (electronic banking) is still a niche with significant potential on the local market. That’s why many lenders have pursued this segment, trying to offer a wide range of services for those customers eager to use them. For example, Intesa Sanpaolo Bank, ING, OTP, BRD-Groupe Societe Generale, RBS, BCR, UniCredit Tiriac Bank, Millenium , Raiffeisen Bank and Banca Transilvania are among the players that have introduced service-banking in their portfolios. According to the lender’s representatives, Intesa Sanpaolo Bank has offered e-banking services since its entrance on the local market. It has proved a tool that eased customer-bank relations and reduced the operational costs for both parties, they add. Meanwhile, back in 2006 ING Bank launched ING Home’Bank, a service that enabled individuals and companies to make banking operations without cash 24/7 through a computer with an internet connection. “Since then our bank has strengthened its position on this market segment by launching constantly innovative services,” says Stefan Radu, director of product management and direct channels at ING Retail Banking. The lender also recently launched a version of its Home’Bank service adapted to mobile phones and a facility for payment of utility bills through the device. The

Mobile society: tech-savvy Romanians are starting to use their phones to carry out banking transactions new Home’Bank application for smartfaction of its customers through rephones was developed for mobile phones motely accessing banking services that have an iOS or Android operation and minimizing the operational costs, system and an autofocus camera. “Rothe lender launched e-banking services manian consumers are very keen to disin April 2006. “Subsequently, in order to cover and experiment with the latest complete its range of services, OTP technologies. We can say that they are a activated SMS alerts in 2007,” adds curious and quite choosy audience. Plus, Florea. the mobile banking service segment is Elsewhere, RBS Romania premiered encouraged by the increased sales of PhonePin code, a method of automatic smartphones both abroad and on the loauthentication for customers who use cal market,” says Radu. RBS Phone Banking, in August 2011. BRD-Groupe Societe Generale is an- “The introduction of PhonePin code is other player that has put a focus on emeant to make phone transactions a banking. In July last year it decided to frequent, safe and rapid practice for our complete its portfolio of products and customers. We thought of an easier way services with the addition of the e-CLICK for our customers to exchange currencies, package, designed mainly for internet make bank transfers, check balances users. “BRD brings a new form of and see their transaction history,” says innovation on the banking market and reMarijana Vasilescu, communication and sponds to the demand of our customers. marketing manager at RBS Romania. The e-CLICK package includes all Last year the lender also launched RBS the online products and services that are SMS Alerts, a service specialized in realin our portfolio: the BRD ePayment card time monitoring of debit and additional attached to a RON current account, cards. internet banking (BRD-Net) and Recently Raiffeisen Bank announced phone banking (Vocalis),” says Philippe that the volume of bills paid last year Lelarge, the executive director of the through the lender was EUR 382 million, strategy and marketing department at more than 50 percent of which was paid BRD. through electronic channels set up by the Meanwhile, Silviu Florea, director of bank – online banking, Smart Mobile, digital banking at OTP Bank Romania, ATM, direct debit and Multicash. “2011 says that in order to increase the satismarked a change in customers’ prefer-

ence for using electronic channels to pay their bills. It is the result of our promotional campaigns and constant investments in launching new and modern services that enable our customers to save time and interact more easily with the bank,” says Florentina Stilu, director of the cash management department at Raiffeisen Bank Romania. One notable move came from BCR, which in February launched 24 Banking, a service the lender describes as the most innovative educational platform for individuals and the first interactive educational game in Romania in the area of electronic payment services. “The scenario of the game is based on the fact that we all often find ourselves in need of information about our bank accounts or to make daily payments. The goal is to use an electronic payment service – an animated internet banking platform created especially to familiarize users with the functionalities,” says Bogdan Marin, executive director of retail channels at BCR. Last but not least, the internet banking service provided by Banca Transilvania, BT24, had 200,000 customers in November last year, an increase of about 40 percent compared with the same period of 2010. The lender’s representatives stated last year that the bank intended at Business Review | April 23 - 29, 2012

least 20 percent of the BT24 internet banking customers to access BT24 mobile banking by the end of 2012. Almost 50 percent of BT internet banking customers are between 30 and 40 years old, about 30 percent are between 20 and 30 and 20 percent between 40 and 50. Some 80 percent of its customers are individuals and the remaining 20 percent companies. The most active customers come from Bucharest, Cluj-Napoca, Timisoara, Oradea, Constanta and Iasi.

How has e-banking developed? Insiders say that many lenders that have invested in this kind of service have posted positive performances for the business line. For example, Intesa Sanpaolo has registered annual growth over the past two years with the implementation of new functionalities, what it describes as a modern and friendly graphic interface and some unique authentication methods like the mobile token. “The objective is to offer more complex and innovative solutions that provide support for existing customers and attract potential new ones that are convinced by the usefulness of these services,” say representatives of Intesa Sanpaolo. Elsewhere, ING Bank has tried to adapt its e-banking services permanently to the needs of its customers and their preferences. “Over time, we monitored our customers’ use of our service and we introduced many innovations. We invest about EUR 1 million a year in developing electronic payment services – Home’Bank, Mobile and Self’bank – because we

MONEY 11 focus on developing banking services dedicated to the channels used by consumers and adapted to their new consumption behaviors,” says Radu. The lender launched Home’Bank back in 2006 and today it has over 350,000 customers. Florea of OTP says that the development of the lender’s services focused on reducing the time required to process a banking transaction and interconnection in real time of all systems from which its e-banking solutions take data.

Mobile banking tipped to dominate

there are about 2-2.5 million smartphones in use, according to market estimations. “Although the volume is still low in Romania and we’re speaking about thousands of users compared with the internet banking market, we predict that mobile banking payments will exceed those made through desktop computers in the next four or five years. This is encouraged by the trend at international level, where operations of different types through mobile and mobile payments are expected to become a mass phenomenon in less than four years, according to the latest study conducted by KPMG,” says Radu. “We expect mobile banking payments to reach 5 percent of internet banking payments by the end of this year. That’s why we intend to strengthen our position on this segment.”

Pundits say it is obvious that the local market has great potential on the ebanking segment as it will make up an increasing weight in customers’ banking activity. “The focus will evolve from the strict operational side of the current ebanking services to more complex solutions oriented toward sale and access “Romanian consumers to more diversified banking products,” are very keen to discovsay representatives of Intesa Sanpaolo Bank. er and experiment with One significant factor that deterthe latest technologies. mines the evolution of internet and We can say that they are mobile banking is soaring sales of smartphones. According to Radu of ING, a curious and quite the high penetration rate of mobile choosy audience” telecommunication combined with the increase in the number of smartStefan Radu phones bought has started to change ING Retail Banking consumers’ behavior significantly and to direct them more and more towards using smartphones for a wide range of acSimilarly, Florea of OTP believes that tivities, in addition to the voice function: the future will belong to mobile banking. online purchases, banking transactions and media consumption. At present “Desktop platforms will also have a com-

ponent of analysis, like a personal financial tool. The purpose of it will be to allow the customer to benefit from a more concrete analysis of his or her financial situation,” he says.

Romanians remain open to new technologies Florea describes Romanians as receptive to such services, considering them more useful and quicker. He says that over 70 percent of the bank’s total transactions are made through OTPdirekt, its internet banking service. Radu of ING adds that only one week from the launch of its mobile banking application, the lender had seen more than 10,000 downloads. “At present this application is used by five times more customers than Home’Bank was in its first week of launch, in 2006,” says Radu. He adds that the lender intends to extend its range of this type of innovative service for its customers. “At present we already have in development products that will continue this line, even in the mobile area,” he notes. The mobile token is the latest move from Intesa San Paolo in Romania. This application can be installed on every type of phone or smartphone, replacing the classic token. “All these innovations and the strategy of an attractive cut in commission for payments made by electronic banking have contributed to the increase in receptivity of our customers and a very high uptake,” adds the Intesa Sanpaolo Bank representative. Business Review | April 23 - 29, 2012


Chinese investors Peking at local market Romania has traditionally nurtured close ties with China, and is well placed to tap into the huge economic potential it has to offer. Ori Efraim, partner, audit, head of the China practice for CEE at KPMG, whose headquarters are based locally, tells BR what might be holding back progress. ∫ OTILIA HARAGA

In what way? It needs to be completely translated into Chinese. The PPP law is complicated and Chinese investors don’t understand it. It is very hard even for people in Romania to understand the law and how they would manage their risks in terms of these investments, what funds they would get back and how. A number of such projects have been announced but then nothing happened. Why do you think was this? The Chinese will not enter into a venture without knowing the entire risks and the reward, and they probably don’t have the answers yet. We have seen a lot of declarations and handshakes, but at the end of the day the decision will not be based on purely political gestures. The Chinese government makes decisions based on cold business analysis. Currently Chinese investors are sitting on the fence, waiting for the elections. Herein lies the main challenge and I hope that Romanian politicians will be wise enough to understand that even if you change a party, it is still in everyone’s best interest to promote such infrastructure projects. What Chinese companies are looking at entering the Romanian market? One is China Railway. We also have Ming Yang, a private Chinese company in the en-

Courtesy of KPMG

What niches could Romania exploit in its business relations with China? One would be renewable energy – Chinese investors are keen to invest in green energy and use their technology, especially in wind farm projects, with turbines based on Chinese technology. Romania is apparently one of the best countries in Europe in terms of geographical conditions for wind farms. Romania also has the benefit of being a low-cost country with a well-educated workforce. Taxes are reasonable. The country is a gateway to Europe, suitable for Chinese investors to enhance their distribution chain by setting up factories here. It could be in any industrial field; they would simply produce here the same products as in China, and then distribute them to CEE. We know about companies that already have factories here such as China Tobacco, but there are many others considering doing business in the food industry. Huawei has hundreds of people working here and has plans to expand, as does ZTE. There are also infrastructure companies such as Shanghai Constructions, which has visited Romania several times. Public-privatepartnership (PPP) projects can be a huge opportunity. However the law needs to be clearer.

ergy field that is looking into projects here. Shanghai Constructions has been here a few times and is now waiting for the elections. What do Chinese investments amount to in Romania? I can say that Chinese investments in CEE amounted to around USD 400 million in 2010. Romania represents a significant part, at least 10 percent and probably more. How many Chinese companies have activities on the local market? Right now there are about 30 big serious firms already in Romania, out of which five or six are newcomers. They are mainly in renewable energy – some of them have a joint venture with some Israeli developers who moved on to wind, but there are also solar energy companies. They have already signed engagements to start projects here. How is KPMG’s China practice going locally? When we set up the headquarters of the China practice locally we envisioned Romania as the most appealing country, with the most significant presence of Chinese investors and I think this has turned out to be true. I would say that we had between 10 and 20 clients last year. A Chinese client who would go to a Big 4 firm is one with large-scale investments. They are very competitive – very price sensitive but very demanding in terms of services, which is very challenging in Romania because you usually end up with lower fees from Chinese clients. They will negotiate a lot. But we do not have a reason to complain in terms of revenues. In CEE we have five native Chinese speakers, three of whom are based in Bucharest. Whenever a delegation of new investors comes, we give them a lot of material in Chinese so they know about the rules in CEE and Romania, the tax regime and the legal environment. One significant barrier for Chinese workers is the red tape they face when applying for a visa or work permit. Business Review | April 23 - 29, 2012



Having your cake and eating it

Photo: Laurentiu Obae

Let them eat cake (and salads, soups and sandwiches): Caffe Latte has branched out

Caffe Latte, 35 Bd Schitu Magureanu, 031 415 8551 DEBBIE STOWE Serving up its namesake beverage when Starbucks was just a twinkle in its franchisee’s eye, Bucharest veteran Caffe Latte must now be about a decade old. For many years, nothing there seemed to change; not menu, not staff, not décor. Then, late last summer, a temporary closure stretched out into autumn until lo! A new Caffe Latte emerged from the cocoon. Gone was the familiar blue and yellow motif and in came a menu extension, taking the fare – hitherto always cake-dominated with just a nod to lunch options – into more savory territory. So, along with the usual half dozen baguettes and toasted sandwiches (RON 7-10) there are now a couple of soups (RON 7), four salads (RON 10-15), lasagna (RON 17) and three set breakfasts that variously combine coffee, juice, water, omelets and croissants (RON 24-30). The move is in tune with the New Austerity, not only because the price-quality ratio is excellent, but because the options address the more serious business of filling up, rather than the decadence of desserts and posh teas and hot chocolates that require their own menus. The soups – tomato and vegetable (carrot, celeriac and tomato) are blended – in Romanian terms supa rather than ciorba. Served with croutons on the side, they were tasty comfort food that does exactly what it says on the tin (speaking figuratively of course – they are freshly made on the premises and no tins are involved). Of similarly Italian/international style are the salads: tuna, Caprese, rucola and Caesar. We tried a simple Ceasar, which was truly a Big Salad – even Seinfeld’s Elaine Benes would have been sated. Unless you’re particularly hungry, you could probably share one between two,

especially if you’re having it as a side salad. Chocolate cake was dense and moist and prettily topped with shards of icing; in any case the cakes are an institution and you’ve probably already tried one. A highlight of Caffe Latte has always been the personnel. The owner has managed to effect a very low staff turnover, so if you pop in one day and come back a couple of years later, you’re quite likely to be served by the same person. Our waiter – a veteran employee – was impeccably polite, friendly and efficient. One tip: the CL menu serves as an approximate guide, rather than a faithful account of the obtainable options. Though about twenty cakes are listed, what is actually available is on view in the glass display case. Similarly the best sandwich – the chicken baguette – is often not to be had. No such worries with the drinks – there’s an extensive array of sprits from grappa to Crodino, most around RON 1214. Wine is RON 13 a glass, beer RON 7-13. The only limitations are logistical. Unfortunately the non-smoking section had to be abolished a few years ago when the law changed. And there is no terrace; al fresco consumption is at a few pavement tables, so if you sit outside you are close to parked cars and the road. (Customers hankering after some green space can take a postprandial stroll in Cismigiu, which is directly opposite.) In any case, Caffe Latte’s loyal clientele doesn’t seem to mind. Nor did anyone seem to mind that the décor had hardly changed over the past decade – though the new look is undeniably smarter. A brown and beige color scheme chimes with the coffee theme, and there’s a lovely wall display fashioned from coffee cups. Though there is a plasma TV on the wall, it was happily on silent and did not impinge on the relaxing atmosphere. Excellent coffee, park proximity and affable staff have ensured a decade of popularity for Caffe Latte. A swish new look and affordable menu extension seem set to continue it. ∫ Business Review | April 23 - 29, 2012


WHO’S NEWS Business Review welcomes information for Who’s News from readers. Submissions may be edited for length and clarity. Get in touch at

Sorin Blejnar was dismissed last week from the position of president of the National Agency for Fiscal Administration (ANAF), Romania’s tax authority, after an analysis of the institution’s performance, government officials announced. Blejnar will be replaced by Serban Pop, who served as vicepresident of the tax authority under the Tariceanu cabinet (2004-08) and was dismissed by order of Prime Minister Emil Boc in January 2009. Last week, Blejnar was put in charge of the department for the investigation of large wealth.

Sunny Kumar has been appointed vice-president and head of business development at GTS Central Europe (GTS) with responsibilities for the Central and Eastern European region. He has 14 years of experience in the telecommunications industry. Prior to joining GTS, Kumar served as sales director at Qwest Communications through the acquisition of OnFiber Communications. While there he held various senior positions in business development, sales and marketing. In addition, he worked at Ernst & Young as strategic consultant in the TMT practice. Kumar is a graduate of the Johnson Graduate School of Management at Cornell University where he earned an MBA degree and holds a Bachelors of Science in Electrical Engineering from the University of Maryland at College Park.

Martin Zouhar has joined Cocoon Bucharest as creative leader. He graduated from the Tomas Bata University in Zlin, Moravia, in the Czech Republic, and has ten years of professional experience in design projects. Zouhar previously worked for the agency’s Prague subsidiary as senior designer. Over the years he has developed projects for brands like Nestle, La Lorraine, Procter&Gamble, Hame and Ahold (Albert).

ISSN No. 1453 - 729X

BUSINESS AGENDA April 25 11:00 GDF SUEZ Energy Romania organizes a press conference to present the results of an employee training program, funded from EU sources, at its headquarters in Bucharest. By invitation only.

The Cold Light of Day

April 23 09:30 Schneider Electric Romania organizes a press conference to mark the launch of an energy efficiency solution for buildings at Radisson Blu Hotel. By invitation only. April 25 11:00 World Class organizes a press conference to mark the launch of a new fitness center in the America House building. By invitation only. April 26 18:30 Superbrands organizes The Tribute Event & Trophy Awards 2011, where international and domestic brands are awarded prizes, at JW Marriott Bucharest Grand Hotel. By invitation only. April 24 09:00 ICAP Romania and CYCLE European organize a conference on credit risk at Radisson Blu Hotel. By invitation only. April 25 ∫EVENT 08:30 BR organizes the third edition of Focus on Renewable Energy at Howard Johnson Grand Plaza Hotel. Representatives from public authorities, financial institutions and energy companies will attend. By invitation only. April 25 13:30 Property Fund organizes a press conference to present the decisions of the shareholders’ general meeting at Radisson Blu Hotel. Mark Mobius, executive chairman, Templeton Emerging Markets Group, will attend. By invitation only. May 10 ∫EVENT BR organizes the third edition of the British Investors Forum. By invitation only. Find out more at

FOUNDING EDITOR Bill Avery EDITOR-IN-CHIEF Simona Fodor SENIOR JOURNALIST Otilia Haraga JOURNALISTS Simona Bazavan, Ovidiu Posirca COPY EDITOR Debbie Stowe COLLABORATORS Anda Sebesi ART DIRECTOR Alexandru Oriean PHOTO EDITOR: Mihai Constantineanu PHOTOGRAPHER Laurentiu Obae LAYOUT Beatrice Gheorghiu

Cold comfort: Henry Cavill takes on the CIA and Mossad in this confusing thriller


With Harrison Ford now pushing 70 and unable to pursue abductors with the dynamism of bygone days, and a fifty-something Bruce Willis not really rocking the torn white vest look so much, the baton of saving your family from kidnappers must pass to a new generation of actors. Step forward Henry Cavill, who does the honors in this shaky action thriller. Cavill looks like he can’t decide whether he should be on the catwalk or the track, and the latter advantage is fortunate as much athleticism is needed when one is required to outrun half the Madrid police force – including those members of it in cars and on horses. But it’s all in a day’s work when one’s nearest and dearest are being held hostage by terrorists. It all started out as a pleasant family holiday on a yacht in Spain. (Well, pleasantish – dad Bruce Willis is a bit tetchy for some reason.) From Dead Calm to Donkey Punch and Adrift, yacht excursions don’t tend to go well in movies. Little surprise, then, that after a brief trip into town Henry returns to the boat to find his loved ones have vanished. Of course the local police are no help whatsoever – as Henry would have known had he watched Frantic, or Gone, or

Taken, or any other kidnapping film. So an untrained twenty-something must single-handedly take on Mossad, corrupt CIA spooks and the Spanish police to rescue his family. Actually, not quite singlehandedly: as he sprints around Madrid he manages to acquire an attractive miniskirted sidekick who conveniently is also athletic and owns a motorbike. As often seems to happen, retrieving relatives from the clutches of kidnappers requires visiting a nightclub, which ups the young, goodlooking people quotient even further. The film shows early promise, with stars such as Willis and Sigourney Weaver as a dubious CIA high-up, and the atmospheric maritime beginning. But it rapidly evaporates, as The Cold Light of Day degenerates into a derivative, implausible and confusing potboiler. The first two of those sins are forgivable if the film has enough panache. Unfortunately it doesn’t, and Willis’s presence just serves as a reminder of the far superior action thrillers he has graced (the Die Hards, of course, but even lesser outings such as Hostage). Modest compensation comes in the form of the action sequences, which are competently enough dispatched, and at just over 90 minutes proceedings are taut. The sun-soaked Madrid setting also provides an appealing backdrop. But overall Willis and Weaver are wasted on this sub-par effort, whose ingredients could have added up at least to an effective and gripping actioner. What instead emerged ought not to have seen the cold light of day at all, and its reception is likely to be as cool as the title. ∫


ADDRESS No. 10 Italiana St., 2nd floor, ap. 3 Bucharest, Romania LANDLINE Editorial: Office: Fax: EMAILS Editorial: Sales: Events:

Director: Mabrouk El Mechri Starring: Henry Cavill, Bruce Willis, Sigourney Weaver On: Cinema City Cotroceni & Sun Plaza, Corso, Glendale Studio, Grand Cinema Digiplex Baneasa, Hollywood Multiplex, Movieplex Cinema, The Light Cinema

Business Review Issue 14/2012 April 23 - 29  

e-service portfolios to cater to the Romanian consumers eager to experiment with new technologies See page 10

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