Hidroelectrica is the largest energy producer in Romania, providing one-third of the country’s electricity. Various government plans to list the company have been in existence for over a decade. Hidroelectrica is a state-supported company and operates over 180 hydroelectric power plants throughout Romania. By the end of next month, it should announce plans to list up to 20% of its shares on the Bucharest Stock Exchange.

Once the local securities watchdog approves the prospectus for the share sale, investment banks will start accepting orders for shares from investors.

Hidroelectrica aims to raise over 1 billion euros ($1.07 billion) through one of the largest initial public offerings (IPOs) in Europe this year.

The public offering will include existing shares owned by Fondul Proprietatea (FP.BX), an investment fund managed by the American asset management company Franklin Templeton (BEN.N).

As of April, Fondul valued its 20% stake in Hidroelectrica at 2.2 billion euros ($2.35 billion), indicating a company equity value of over 10 billion euros. However, Fondul Proprietatea stated last year that it is unlikely to sell its entire stake in the domestic IPO after canceling plans for a dual listing in London and Bucharest.

While the Romanian government is not selling any shares, the IPO is part of an agreement made with the European Union to secure funds for post-pandemic recovery.

Hidroelectrica’s IPO plan comes at a time of relative calm in the European IPO market, as high interest rates and geopolitical uncertainties nearly paralyzed the market last year.

Advisors involved in the IPO hope that prominent players like Hidroelectrica will contribute to reviving listing activity in the second half of this year and in 2024.

Source: Reuters.com