Fondul proprietatea selects investment banks for Hidroelectrica IPO

Franklin Templeton, Alternative Investment Fund Manager and sole director of Fondul Proprietatea, announced that the Fund and Hidroelectrica selected the consortium of investment banks, a key milestone for the planned IPO.

According to Ziarul Financiar, citing sources familiar with the deal, they are Citi, Morgan Stanley, Erste and Jefferies (global managers), Bank of America, Barclays, UBS, UniCredit and Wood (joint managers) and respectively Banca Transilvania-BCTP and Swiss Capital (co-lead managers).

The role of the selected investment banks in the IPO process is to recommend the optimal structure of the transaction, promote the equity story of Hidroelectrica among local and international investors, place securities in the IPO, as well as assist with the listing process.

“We firmly believe that the IPO and the subsequent listing of Hidroelectrica will bring significant benefits to the Romanian capital markets and Romania as a whole, as it has great potential to attract significant domestic and foreign investors for the Romanian leading electricity production company,” stated Ilinca von Derenthall, Chairperson of the Board of Nominees.

Rothschild & Co is Fondul Proprietatea's financial advisor in this transaction. Hidroelectrica's listing will take place after an initial public offer (IPO) in which Fondul Proprietatea plans to sell at least 15% of the company's shares, out of its 20% stake. The Romanian state, which holds the majority stake of 80% in Hidroelectrica, has approved the listing but is not willing to sell any shares.

Hidroelectrica is the most valuable state-owned company in Romania and, based on its recent results, probably the most valuable company overall in the country. Fondul Proprietatea's half-year report indicated an overall valuation of EUR 12.9 bln for Hidroelectrica. Based on this figure, an IPO for 15% of the company's shares would amount to over EUR 1.9 bln, which would make it by far the biggest listing in Romania's history.

Hidroelectrica was the most profitable company in Romania in 2021 and the rise in energy prices continued to push up its profits in 2022 as well.

(Photo source: Facebook/Hidroelectrica)