Hidroelectrica exits insolvency, preparing IPO

The biggest privatisation in Romania’s history is underway after the main court in Bucharest ruled Hidroelectrica SA isn’t insolvent anymore, Act Media reported. The company will be listed when the best conditions for pricing are achieved, minister of energy Victor Georgescu said at a press conference on June 24.

Hidroelectrica will focus on modernization, investments and preparation for IPO, he said. The minister added the proceedings from the initial public offering (IPO) will not cover the budget deficit, like after other privatisations.

He also said the government-owned utility will be listed only after non-core assets are divested. The Ministry of Economy, majority shareholder in Hidroelectrica, plans to offer a package of 15% in ownership. Hidroelectrica was first declared insolvent in 2012. The status was abolished in June next year and reinstated in February 2014.

During insolvency, the company underwent a radical process of restructuring and efficiency, said Remus Borza, the judicial administrator. Hidroelectrica became the most profitable business in the coutry he added.

In mid-June, the utility won a contract worth EUR 12.7 million to provide electricity to the Bucharest metro operator Metrorex for one year, according to the Electronic System for Public Acquisitions (SEAP). The contract for 170,000 MWh will be payed from budget funds. A week later, Hidroelectrica was selected to supply power to Bucharest Autonomous Authority of Transport (RATB) through June next year for EUR 8.62 million.