Hidroelectrica IPO likely in May-June, board member says

Romania’s state-controlled hydropower group Hidroelectrica will carry out the IPO at the Bucharest Stock Exchange (BVB) either in the first part of May or in June, after filing the prospect with the financial market authority ASF in April, Karoly Borbely, a member of the company’s managing board, explained, quoted by Ziarul Financiar.

This would meet the end-June deadline agreed upon by prime minister Nicolae Ciuca and Fondul Proprietatea last autumn.

Borbely explained that the calendar is decided in accordance with US regulations, meaning the IPO would take place within 135 days after the approval of financial results.

The IPO is designed to allow restitution fund Fondul Proprietatea (FP) to cash part of its 20% stake in Hidroelectrica, while Borbely added that, in the future, the Romanian state might decrease its 80% participation to 65%-70%.

The manager of FP, Franklin Templeton, argued for a dual listing in Bucharest and London – but its shareholders approved the scenario backed by the Romanian authorities, and Hidroelectrica shares will be listed only in Romania.

The local market wouldn’t be deep enough for the 20% Hidroeelctrica stake, Templeton argued. But the pension funds interested in the shares are already significant shareholders of FP, and this contributed to the outcome of the vote in the FP shareholder meeting on November 15 when the single-listing scenario was endorsed.

According to the most recent official data cited by Profit.ro, Romanian institutional investors hold more than 40% of the voting rights in Fondul Proprietatea as shareholders, and Romanian individual shareholders almost 23%.

(Photo: Andranik Hakobyan | Dreamstime.com)