Romanian pension funds to name their representative in Electrica board, EBRD will also have a member

Romanian private pension funds are among the largest private shareholders of the recently privatized electricity distributor Electrica and should name one representative in the company’s board, according to Lucian Anghel, CEO of pension fund administrator BCR Pensii. “In Electrica, next to EBRD, I think we should have a member of the board named by the local private pension funds as well. He will make sure that the interests of the 4 million active participants to these funds, but also of the individual investors who bought shares in the Electrica IPO will be represented,” Lucian Anghel, who is also president of the Bucharest Stock Exchange (BVB) said in an investors’ forum organized by BVB on June 28-29. The European Bank for Reconstruction and Development (EBRD), which bought an 8.6 percent stake in Electrica for EUR 75 million, in the initial public offering (IPO) that finished last week will for sure have a member in the company’s board. Before making this investment, EBRD and Electrica’s management have signed a framework agreement for the implementation of a corporate governance action plan and an environmental and social action plan. According to this agreement, the Romanian state, which still owns 49 percent of the company, after the IPO, will name two members of the company’s board. EBRD will name its own representative, the other private investors will name one, and the fifth spot in the board will be held by an independent member who will be selected by a recruiting firm and voted by the other members. “Electrica’s IPO – Romania’s largest to date – is a landmark transaction. Our participation demonstrates the EBRD’s commitment to supporting the government’s plans for increased privatization of the energy sector. We will work with the company towards the successful implementation of an ambitious set of measures to align its corporate governance with international standards. This will provide additional comfort and confidence to potential future investors,” said Nandita Parshad, Power and Energy Director at the EBRD. Romania’s largest electricity distributor Electrica managed to pull EUR 444 million through an initial public offering (IPO) that took place between June 16 and June 25, 2014. This was the largest IPO ever made in Romania. The IPO was two times oversubscribed, according to state representatives. In the IPO, Electrica sold 177.19 million shares, representing 51 percent of its capital. Some of these were sold as global depository receipts (GDRs) which will trade on the London Stock Exchange, with one GDR accounting for four Electrica shares. In the end, a fifth of the shares sold in the IPO went to GDRs