Romania’s initial public offering of a 51 percent stake in national electricity distributor Electrica, which raised EUR 435 million last month for the company, serves as a good indicator of investors’ interest in the regulated power assets. This suggests that Italian group Enel could raise EUR 2 billion or more for its assets in the country, according to Cosma Panzacchi, analyst for London-based Sanford C. Bernstein, quoted by Bloomberg.

Enel has all its electricity distribution assets in Romania for sale, which include a majority stakes in the companies that powers Romania’s capital Bucharest, as well as Timisoara and Constanta, two of Romania’s largest cities.

These companies manage a power grid of about 91,000 kilometers in the regions where they operate, distributing about 14 TWh of electricity a year (with a domestic market share of 34 percent) and selling nearly 9 TWh a year to about 2.6 million customers, of which 2.4 million are residential customers (with a domestic market share of 20 percent) and 0.2 million are businesses (with a domestic market share of 38 percent). In 2013, those companies had consolidated revenues of EUR 1.12 billion and operational profit (EBITDA) of EUR 289 million.

The sale might get complicated as the Romanian Government said it will open a legal case against Italian group Enel asking it to pay EUR 521 million for the 23.6 percent stake that the Romanian state holds in the former electricity distribution company Electrica Muntenia Sud, which is now controlled by Enel.

editor@romania-insider.com