Fondul Proprietatea evaluates Hidroelectrica at EUR 3 billion

Fondul Proprietatea (FP) assessed the 19.9% equity stake in Hidroelectrica SA in December to be worth RON 2.65 billion (EUR 586 million), valuing the whole company is at EUR 3 billion, up 22% from the previous estimate, The Diplomat reported. The revisions of December 2013 and 2014 were upward, but the last update had the most significant increase. Hidroelectrica is the largest energy producer in Romania, 80% owned by the government. The company is the most profitable in the state portfolio, which is why it earned the title “pearl of the crown,“ the article said. Last year Hidroelectrica had gross profit of EUR 221 million and turnover of EUR 704.7 million, according to administrator Remus Borza. The hydropower producer was declared insolvent in 2012.

In 2015, Hidroelectrica’s output fell 2.5 TWh to 15.9 TWh. Turnover was EUR 760 million and profit stood at RON 1.1 million, according to the Hidroelectrica press release. In the past two years the company has reduced its headcount from 5,239 to 3,443 and its earnings before interest, tax, amortisation and depreciation (ebitda) was 63% of the turnover, Borza added, according to a report by the Business Review. The budget set by Hidroelectrica in 2015 for the next five years was of EUR 1.3 billion, of which EUR 75 million was allotted to the revamping of the Stejaru plant, and another EUR 240 million to the revamping of the Vidraru, Mărişelu and Râul Mare Retezat plants, with the contracts to be “attributed during this year through international auction,” reports the press release.

The latest estimates are that Hidroelectrica will come out of insolvency in May or June, so the listing on the Bucharest Stock Exchange will take place next year, but Borza aims at November of this year, portal Nine o’Clock said. In 2013, the government decided to list the company on the Bucharest Stock Exchange, by increasing its capital and launching an IPO for the newly issued package of 15% of the registered capital existing prior to the increase.

The Competition Council has sanctioned Hidroelectrica and its ten contractual partners, mainly electricity traders, with fines of EUR 36.57 million in November for concluding irregular agreements.