Electrica IPO: Romanian energy minister talks to EBRD about long term investment

Romania’s energy minister Razvan Nicolescu had a meeting with representatives of the European Bank for Reconstruction and Development (EBRD) in London, on Tuesday, June 18, to talk about EBRD’s participation to Electrica’s IPO and the possibility to become a long term investor in the company. “We expressed our wish and trust that EBRD will be a long term partner for the Romania state in Electrica and that it will use its vast experience to support implementing international corporate governance standards in the company. We hope this IPO will promote Electrica and, implicitly, Romania as a good business destination, as well as stable and predictable for investments,” Nicolescu said. Romanian state owned electricity distributor Electrica launched, on June 16, an initial public offering (IPO) to sell 177.19 million shares, which make some 51 percent of the company’s capital. The company aims to get between EUR 440 million and EUR 540 million from the IPO. EBRD might be one of the largest investors in the Electrica IPO. The representatives of the financial institution have already been involved in the making of the new incorporation document for Electrica, and insisted that some clauses be introduced which will not allow the Romanian state to take important decisions for the company by itself, sources from the capital market told Romania-Insider.com. After the IPO, the Romanian state will remain the company’s main shareholder, with 49 percent of the voting rights, this is why institutional investors wanted guarantees that the state will not be able to take decisions incongruous with the interests of the other shareholders. EBRD might hold between 5 percent and 10 percent of the company and will have a representative in the company’s administrative board, the same sources said. The Romanian energy minister and the company’s management, together with members of the intermediation consortium for the IPO, met with EBRD at the start of their international road-show which is part of the IPO marketing to international institutional investors. The road-show will cover all the major financial centers in Europe as well as New York and Boston in the U.S. The IPO will end on June 25. Citigroup, Societe General, Raiffeisen Bank Romania, BRD and Swiss Capital make the consortium which intermediates the offering. The small tranche for individual investors in Electrica’s IPO was subscribed in just two days. Andrei Chirileasa, andrei@romania-insider.com