Electrica IPO: Romanian Govt. sets minimum price, company wants to raise over EUR 435 million

Romania’s Government recently decided that the minimum selling price for the 51 percent stake in electricity distributor Electrica will be RON 11 (EUR 2.5) per share, which brings the total value of the company’s initial public offering (IPO) to more than EUR 435 million, energy minister Razvan Nicolescu said after the weekly Government meeting on Wednesday, June 11, 2014. The maximum price in the offer will be RON 13.5 (EUR 3.075) which means that the total value of the offering could go as high as EUR 533 million. “This is practically the largest listing process ever on the Romanian capital market. The company must get a minimum of EUR 435 million for the listing to be successful,” Nicolescu said. He added that it’s a proof of courage from the Government to try and list a 51 percent majority stake. “It is a way to encourage the local capital market but also a means to make state owned companies more transparent and to improve their efficiency,” Nicolescu concluded. Electrica is to be listed both on the Bucharest Stock Exchange and on the London Stock Exchange. For the London listing, a part of the IPO will be structured in global depository receipts (GDRs), with each GDR accounting for four Electrica shares. This means that the minimum price of a GDR will be EUR 10 and the maximum price will be EUR 12.3, according to Romania-Insider.com calculation based on the current exchange rate. The company announced it plans to sell over 177 million shares representing 105 percent of its current capital. According to Nicolescu, 85 percent of the offering will be allotted for the institutional investor’ tranche, which also includes the GDRs, with the remaining 15 percent to be reserved for retail investors. “The portion of the offering which will be allotted to retail can go as high as 22 percent, if there will be strong demand on their part,” Nicolescu said. Electrica’s IPO will be launched on Monday, June 16, and will end on June 25. The offering is managed by a consortium which is made of Citigroup Global Markest, Raiffeisen Bank Romania, Societe Generale, BRD and Swiss Capital. The IPO values Electrica at between EUR 853 million and EUR 1.05 billion. In 2013, the group’s consolidated revenues were EUR 1.17 billion, and net profit was EUR 71 million. Andrei Chirileasa, andrei@romania-insider.com