Electrica’s IPO shows international interest for Romania’s reform commitment

The EUR 444 million initial public offering (IPO) of Romania’s electricity distributor Electrica, the first state-owned company to privatize by selling a majority stake on the capital market, shows the commitment of the Romanian Government to continue structural reforms and the opening of the economy, prime minister Victor Ponta said in his speech at the opening bell ceremony that marked Electrica’s debut on the London Stock Exchange. “This is a positive message for the direction of the Romanian economy, for the structural reforms that we have started, for the privatization and opening of the economy,” said Victor Ponta, who opened the London Stock Exchange for the second time in the last six months, after doing this back in November for the listing of Romgaz, Romania’s largest gas producer. “Now we must prepare something for November,” Ponta added. The opening in London was simultaneous with trading opening for Electrica’s shares on the Bucharest Stock Exchange (BVB), which was attended by officials from Romania’s Energy Department. They said that the record amount which the company raised on the capital market demonstrates that international investors are interested in Romania. They also promised that the next IPO of a state owned company, that of electricity producer Hidroelectrica, will be even more spectacular. “Electrica’s listing was a great effort. The fact that we made a majority privatization on the capital market was possible first of all because the Prime Minister wanted to make a strong example for the modernization of Romania’s economy,” said Gabriel Dumitrascu, the head of the privatization office in the Energy Department. Dumitrascu coordinated the Electrica listing on behalf of the state.

“We hope this will confirm that privatizing through the capital market is the best way to privatize state owned companies and to improve their corporate governance. I will end with a promise that Hidroelectrica’s IPO will be even more spectacular than Electrica’s,” Dumitrascu added.