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May 30, 08:42

Electrica IPO price to be announced tomorrow, offering starts next week

energy

The price for which Romanian electricity distributor Electrica will sell 51 percent of its own shares both on the Bucharest Stock Exchange (BVB) and the London Stock Exchange (LSE) will be announced tomorrow (Wednesday, June 11), following approval from the Government, sources from the Romanian capital market told Romania-Insider.com.

Electrica’s initial public offering (IPO), which shuld be the largest transaction of this kind ever made on the local capital market, is set to start on Monday, June 16, and will close on June 25, according to statements from Romanian state officials.

The company announced its intention to launch an IPO at the end of May. The offer consists of 177 million new shares, representing 105 percent of the company’s total number of existing shares. They include shares and GDRs (global depository receipts), with one GDR standing for four shares, the company announced.

During the last two weeks, the managers of the offering were engaged in the pre-marketing activities for the IPO, which means they contacted potential investors and presented them the company while at the same time asking them how many shares  they would be interested to buy and at what price. Based on that feedback from investors, they established the price range for the offering.

This price range remains to be harmonized with the Government’s expectations, which still requires some negotiations. Following these negotiations, which should end today (June 10), the official price range will be presented on Wednesday’s weekly Government meeting for approval.

The offering price cannot, by law, be lower than the shares’ face value, which is RON 10, which means that the offering will for sure be larger than RON 1.77 billion (EUR 400 million). This will make it larger than the Romgaz IPO last year, in which the Romania state sold 15 percent of the company for EUR 390 million.

After it gets the Government’s approval, the price will be filled up in the IPO prospectus, which should then be approved by the Romanian Financial Supervision Authority ASF. After this step, the prospectus should be made public, either on Wednesday evening or on Thursday this week. The prospectus will be available on the Electrica website, on the Bucharest Stock Exchange website, but on sites of the intermediaries as well.

The consortium which manages the Electrica IPO consists of Citigroup Global Markets Limited, Raiffeisen Bank Romania and Société Générale Corporate & Investment Banking, who are joint global coordinators and joint bookrunners for the offer, BRD-Groupe Société Générale (Romania) as manager, and local brokerage firm Swiss Capital, as distribution agent.

Andrei Chirileasa, [email protected]

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