Hidroelectrica does not want to pay any more extra dividends, FP thinks it sits on too much cash

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Bogdan Tudorache

Hidroelectrica can no longer offer additional dividends, in the context of which the company, according to the governance program, is preparing for privatization next year, has in perspective also the acquisition of CEZ assets in Romania and intends to diversify, making new investments.

“It is no longer appropriate to give additional dividends,” said Bogdan Badea, president of the Hidroelectrica’s directorate.

He complained that Hidroelectrica and Nuclearelectrica will have to support all regulated consumption… “it is not known to what extent”. “We agree with Hidroelectrica, the liberalization should take place as quickly as possible,” said Johan Meyer, CEO of Franklin Templeton Investments and Fund Manager, Fondul Proprietatea (FP) for energynomics.ro.

However, he argues that the cash position (own funds) of Hidroelectrica is much too large, of 2.5 billion lei, with which not too many investments were made, another 100 million lei being generated monthly in the company’s deposits, so even in the case of a privatization, Hidroelectrica can also support special dividends, without affecting its market price. “The investment plan is by no means fulfilled,” Meyer said.

At the same time, Meyer argues that the acquisition of non-core assets for Hidroelectrica such as CEZ’s would not make financial sense since they are not in the same sphere of business and generate a much smaller profit than the rest of the company. “It would not generate the same profit for investors and would dilute the value of Hidroelectrica,” Meyer added.

Meyer says that liberalization should take place “as soon as possible”, GEO 114 generating uncertainty of unmatched magnitude, raising prices and affecting the ability of companies to operate. “The risks are much greater in the absence of liberalization… The vulnerable consumer must be defined urgently,” he said, explaining that there are already models of definitions within the countries of the Union.

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