Romania’s electricity distributor Electrica’s initial public offering (IPO) should be fully subscribed by Monday, June 23, two days before it is set to end, energy minister Razvan Nicolescu said.

Electrica, which is currently 100 percent state-owned, launched an IPO on Monday, June 16, to sell 177.19 million shares, representing 51 percent of the company’s capital. The minimum value of the offer is EUR 443 million, as the company sells its shares at a minimum of RON 11 and a maximum of RON 13.5. The shares will then be listed on the Bucharest Stock Exchange (BVB).

A part of the offer will be structured in global depository receipts (GDRs) which are financial instruments to be traded on the London Stock Exchange. One GDR stands for four Electrica shares and the price for GDRs is between USD 13.55 and USD 16.63.

“Electrica’s IPO is going well. I expect that it will be fully subscribed by Monday, June 23, at the latest,” Nicolescu said.

He went in an international roadshow to promote the IPO along with the company’s management and the brokers of the offering. They first met with representatives of the European Reconstruction and Development Bank (EBRD) in London, on Tuesday, to talk about EBRD’s participation in the IPO as a long term investor in Electrica.

“Electrica is a company with good perspectives and that’s why its prospectus is worth analyzing. We wish it to become a model for Romania on corporate governance. The agreement with EBRD on this matter will help the company a lot,” Nicolescu mentioned.

According to the prospectus, 85 percent of the shares in the IPO are allotted for institutional investors and 15 percent for individual investors, which have two tranches, one for small subscriptions, of up to 20,000 shares, which is 7 percent of the total number of shares, and one for large subscriptions of more than 20,000 shares, which stands for 8 percent. The final allotment may change depending on the level of subscriptions on each tranche.

The small tranche has already been oversubscribed by 76 percent. On Thursday, June 19, at 17:00, there were more than 10,500 orders registered on this tranche, for a total of 21.87 million shares. Some 7 million shares were subscriptions smaller than 1,000 shares, which get guaranteed allocation (one share allotted for each share subscribed), while some 14.8 million shares were subscriptions larger than 1,000 shares, which get a 5 percent discount on the final IPO price.

On the tranche for large subscriptions, there were 68 orders for almost 4 million shares, which is about 28 percent of the number of shares dedicated to this tranche.

The total value of subscriptions from individual investors is EUR 67 million.

Andrei Chirileasa, andrei@romania-insider.com