The listing of Hidroelectrica will be the most important event for the Romanian capital market, with the Fondul Proprietatea (FP) aiming to obtain a reference price of at least €2.3 billion for its 20% stake in the company, said Marius Dan, Deputy CEO, Corporate Strategy Franklin Templeton Bucharest, at the Energy Strategy Summit 2022, an event organized by Energynomics. If the dual listing is not approved, FP will have to reduce its stake in the sale, he argued.
“We remain a pressure factor in state-owned companies, for the continuation of good corporate governance, because this is important for the energy sector, for energy security in Romania,” said Marius Dan.
FP is a closed fund with assets of €3.5 billion, dual listed on the Bucharest Stock Exchange and the London Stock Exchange. “We own 20% of Hidroelectrica, which represents 70% of FP’s net assets – by far the largest asset in the portfolio. We hold stakes in OMV Petrom, Bucharest Airports, Engie, Enel, Port of Constanta, Salrom and other companies. The listing of Hidroelectrica is in the foreground, it is the most important event for FP, for the Romanian state, for the capital market. We have had the opening to sell our entire share package, i.e. 20%, we have the shareholders’ approval obtained in March, we have already selected the equity advisor, and Hidroelectrica has also already selected a financial advisor and lawyers for the transaction for two years. In the next period we will select the consortium of banks that will execute the listing. It is by far the largest transaction on the Romanian capital market,” he added.
“On the share package that we hold we estimate to get a minimum valuation of over €2.3 billion, and such an IPO, listing at this level, is large in value even for the London or New York markets. Our desire is to dual list Hidroelectrica, both on the BSE and on an international stock exchange – most likely the London Stock Exchange, where we already have listed companies in the energy sector, such as OMV Petrom, Romgaz, Electrica and FP – but at the moment we have shareholder approval for a listing only on the BSE and we are waiting for the banks that will be selected to make a recommendation for the ideal structure of this transaction. From our point of view and from the discussions we had with 20 international banks, when they heard about a listing only on the BSE, they became quite shy, they did not want to promise anything, but the consensus was that in order to have a successful listing, at a valuation that satisfies us, that satisfies FP shareholders, and that is in the interest of the Romanian state, which owns 80% of Hidroelectrica, there must be a dual listing”, added Marius Dan.
The FP intends to market a minimum stake of 15%, following the conditions outlined in the NPRP.
“If we don’t have a listing in London, we will most likely have to scale back the package we put up for sale, because it’s very hard to imagine attracting more than $7 billion in demand for this IPO – and I’m referring to this figure because the supply has to be met by demand two to three times the value of the package sold,” he added.
Energy Strategy Summit 2022 was organized by Energynomics with the support of its partners: ABB, BCR, CE Oltenia, Chimcomplex, Eaton, Electrica Furnizare, Electroalfa, EnergoBit, Enevo Group, European Energy, Eximbank, EY, Franklin Templeton, Horváth, ING, Hidroelectrica, Marsh, MET Energy România, Nuclearelectrica, BCR Pensii, Photomate, Powertis, Renomia Gallagher, Schneider Electric, Transelectrica, Volt, wpd.
