Acasă » Electricity » Hidro » Hidroelectrica IPO: 15% of the FP offer is addressed to Romanians, but the ceiling may increase

Hidroelectrica IPO: 15% of the FP offer is addressed to Romanians, but the ceiling may increase

27 June 2023
Bogdan Tudorache

After issuing the issue prospectus late at night, Hidroelectrica’s listing started on Friday, June 23, with the right, numerous retail investors showing their interest in the new H2O tilts, listed on the Bucharest Stock Exchange. The officials involved told us that they worked until 3.00 am, and in the morning the process continued. “It was a tremendous effort and we got all the documents in record time,” they told Energynomics.

“Starting today and until July 4, all potential investors can express their intention to purchase shares in Hidroelectrica. Starting today, every Romanian can be a shareholder in Hidroelectrica. Together with Fondul Proprietatea, we made the decision as the retail tranche addressed to any of you to be extremely generous: 15% of the Proprietatea Fund’s offer will go to Romanians, and if the demand is high enough, this ceiling will be increased up to 20%. If I’m not mistaken, it is the largest retail tranche of a listing made in Romania,” said Bogdan Badea, president of the Hidroelectrica Directorate, during the press conference at the launch of the company’s IPO. Bogdan Badea admitted that his mandate has come to an end, and although according to some sources it could be extended, Bogdan Badea did not provide details regarding this aspect.

“My mandate has already come to an end. We are, at the moment, on interim mandates, sure that, in accordance with GEO 109, the selection procedures of the Directorate are following. The selection procedure of the Supervisory Board for the next four-year period has already been concluded, the other selection process is to take place in the next period,” said Badea.

The indicative range of the Offer Price was set between 94 RON and 112 RON per Offered Share (“Offer Price Range”), which corresponds to a market capitalization of 42.3 billion RON to 50.4 billion RON (from EUR 8.5 billion to EUR 10.2 billion).

The anticipated level of the Offer, including any Over-Allotment Option (as defined below) is up to 89,708,177 Offered Shares to be sold by Fondul Proprietatea S.A., representing up to its entire 19.94% stake from the issued share capital of Hidroelectrica.

Small investors can subscribe at the price of 112 lei per share, the minimum subscription being 50 titles. For institutional investors, the price range is of 94 lei – 112 lei per share. According to some sources, about 15% of the tranche intended for individual investors was subscribed by Friday afternoon.

The IPO offers retail investors a 3% discount

“What I can tell you is that recently there have been countless meetings with potential investors, both from the area of institutional investors in Romania and eligible institutional investors, practically, from all over the world. The interest is very high, we have had many positive feed-backs. Of course, the effort on the part of the company is not over. We will continue during this week and next week to have meetings and talk with potential investors who want to be part of this initial public offering, both from Romania and from other countries. It’s a historic moment,” Bogdan Badea also said.

“This is the largest IPO in Romania, in Central and Eastern Europe, and potentially in all of Europe this year, at least so far. The last 13 years have been an incredible journey for Franklin Templeton and Fondul Proprietatea, and Hidroelectrica has advanced a lot during these years and it was very nice to see how it has grown in terms of profitability, corporate governance, management,” also said Johan Meyer, the General Manager of the FTIS branch in Bucharest and the Portfolio Manager of the Fondul Proprietatea.

Meyer also stated that there is increased interest from foreign investors. At the same time, the IPO offers retail investors an initial discount of 3%, during the first five working days of the offer period.

He explained that the anticipated level of the offer, including any Over-Allocation Option, is up to 89,708,177 shares offered to be sold by Fondul Proprietatea S.A., representing up to its entire participation of 19.94% of the issued share capital of Hidroelectrica.

“It depends on the demand from investors,” he said.

The money obtained from the offer will be allocated “according to the decision of the FP shareholders”, and the shares will benefit from the support of a market maker (Erste), Meyer also said, answering questions from the press.

A generous dividend policy

Yesterday (June 22), during the Hidroelectrica AGM, a new generous dividend policy was approved, Bogdan Badea also said.

“It is in line with the dividend policy that the company has had recently. It is just a document that gives investors confidence that we will continue the dividend policy. The company’s intention, in addition to consolidating and increasing performance from a financial point of view, is to have organic growth as well. After this IPO process, we will focus on the investment area, on increasing the supply activity, to be the main pillar of the Energy Transition,” said Badea.

Hidroelectrica has a very low debt level, and a possible pressure on CapEx (capital expenditure) can give the company the opportunity to issue new bonds or possibly access new lines of credit, Badea also commented.

“The Crucea wind farm was purchased with a green credit line – I think the first one granted by a bank in Romania – and we will continue to use these means, if necessary,” said Badea.

Autor: Bogdan Tudorache

Active in the economic and business press for the past 26 years, Bogdan graduated Law and then attended intensive courses in Economics and Business English. He went up to the position of editor-in-chief since 2006 and has provided management and editorial policy for numerous economic publications dedicated especially to the community of foreign investors in Romania. From 2003 to 2013 he was active mainly in the financial-banking sector. He started freelancing for Energynomics in 2013, notable for his advanced knowledge of markets, business communities and a mature editorial style, both in Romanian and English.

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