Raiffesen Bank and Citigroup buy back EUR 17 mln worth of Romania's Electrica shares to stabilize price

Romanian Raiffeisen Bank and American Citigroup have bought back Electrica shares and global depository receipts (GDRs) worth a total of EUR 17 million to stabilize the market price after the company was listed on the Bucharest Stock Exchange and London Stock Exchange, Romania-Insider.com calculated based on data released by Raiffeisen. Raiffeisen Bank bought 5.2 million Electrica shares from the Bucharest Stock Exchange (BVB), from July 8 to July 22, at prices ranging from RON 10.75 to RON 11. Citigroup also bought 421,000 Electrica GDRs from the London Stock Exchange, in the same period, at prices between USD 13.25 and USD 13.66. The total value of the acquisitions was around EUR 17 million. Raiffeisen Bank announced that the period for stabilizing the share price ended, so no further such purchases will be possible. Romania’s largest electricity distributor Electrica was listed on the Bucharest Stock Exchange and the London Stock Exchange on July 4, following a EUR 444 million initial public offering (IPO), in June, the largest ever of a Romanian company. Electrica sold 51 percent of its own shares and the Romanian state reduced its stake in the company’s capital to 49 percent. Electrica let 4.75 percent of the gross funds it received in the IPO, which is some EUR 21 million, to the disposal of the managing consortium for share buybacks as part of the stabilizing process. These buyback were to be activated only if the market price of the shares went below the IPO price of RON 11 per share or USD 13.66 per GDR (one GDR stands for four Electrica shares). Electrica shares grew as much as 2.4 percent on their debut on the Bucharest Stock Exchange, but in the following days the price went under the RON 11 threshold, which prompted the consortium to intervene and buy back shares to stabilize the price. The shares and GDRs that were bought back will be canceled. Electrica’s shares are currently trading on the BVB at RON 10.94 (on August 4 and 10:00 AM), which is close to the IPO price. The company has a market capitalization of EUR 851 million. Andrei Chirileasa, andrei@romania-insider.com