Romanian and Croatian governments announce IPO of state power utilities

August 8, 2017

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Romanian and Croatian governments announce IPO of state power utilities

Romanian and Croatian governments have announced plans to initiate IPOs of their state-owned power utilities, Hidroelectrica and Hrvatska elektroprivreda (HEP) respectively.

The Croatian government plans to initiate the sale of more than 25 percent of HEP shares through the Initial Public Offer (IPO). The HEP shares will be offered to citizens, institutional investors, and employees, Večernji list wrote citing sources in the government.

The Croatian daily said that this could happen next year. Previously, however, HEP and the state have to solve the issue of ownership of hydroelectric power plants (HPPs) and a new HEP management to be appointed. The process of appointing the new management is still ongoing.

The HPPs ownership issue has to be solved in order to determine total value of HEP assets, which is estimated at around EUR 2,7 billion. If this estimation proves correct, the sale of HEP shares would provide EUR 675 million.

The money raised through the IPO would be reinvested, and used for additional capital expenditures as well.

Romania to offer 15 percent stake in to phases

The recent court decision to declare Romanian largest power producer solvent has unblock the Initial Public Offer (IPO) sale of 15 percent of company’s share. Court proceeding was initialized five years ago and its intent was to contest the IPO.

Romanian government now wants to sell Hidroelectrica’s shares in two phases. In the first phase, it plans to list 10 percent on the Bucharest Stock Exchange (BVB), and then another 5 percent.

Romanian Minister of Energy Toma Petcu said that the government wants to list first 10 percent stake to see how the market will react, and how Hidroelectrica will function as a listed company. According to him, the state could then list the remaining 5 percent.

The funds will be used for Hidroelectrica’s investments program.