Romania’s utility group Electrica to borrow EUR 1 bln to finance acquisition plan

Romania’s electricity utility group Electrica, controlled by the state (49%) and listed at the Bucharest Exchange (BVB: EL), with supply and distribution operations, requested the shareholders’ approval for borrowing up to EUR 1 billion. The money will be used for acquisitions.

Electrica expressed plans to buy companies (shares/social parts), business lines, or individual assets within the activity fields of the Electrica Group, to expand operations nationally, as well as regionally and in other EU member states.

The company’s management also requested shareholders’ approval, in principle, for initiating due diligence procedures relevant to such transactions.

Economica.net reported that Electrica is in talks with the investment fund Macquarie for taking over Distribuție Energie Oltenia (DEO).

Macquarie has been planning for some time to sell the electricity distribution company DEO, the last large asset of all those purchased from CEZ four years ago in Romania that it still owns.

According to several sources in the energy market, since spring, representatives of the investment fund have held exclusive discussions with the French from Engie, present on the Romanian market with gas distribution and supply, and with energy production from renewable sources.

Although Macquarie would like to sell the distribution business in Oltenia relatively quickly, market insiders say they will not sell at any price; in any case, they will not sell for less than the regulated asset base, estimated at around EUR 750 million. According to sources, the claims could even go up to EUR 1 billion.

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