Renewables

Romania’s Hidroelectrica plans IPO at Bucharest Stock Exchange

Romania Hidroelectrica IPO Bucharest Stock Exchange

Photo: Hidroelectrica

Published

April 5, 2022

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Published:

April 5, 2022

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The Government of Romania allowed Fondul Proprietatea, the minority shareholder in Hidroelectrica, to conduct an initial public offering of at least a 15% stake in the state-owned hydropower plant operator. The investment fund seeks a dual listing, in Bucharest and in London, but Romania prefers a domestic-only IPO.

After several failed attempts, renewable energy producer Hidroelectrica is again preparing for a stock market debut. Romania’s flagship hydropower producer, 80.1% owned by the government, got a green light to sell at least 15% in an initial public offering.

The plan is part of an agreement with the European Commission regarding the adoption of the National Recovery and Resilience Plan (NRRP or PNRR in Romanian), local media reported. Fondul Proprietatea, which holds a 19.9% stake, has long been pushing for an IPO. The investment fund’s shares are the ones that would be offered as Romania blocked the sale of state assets, though the two-year freeze is expiring soon.

The government has a small stake in Fondul Proprietatea as well. The Hidroelectrica holding makes up most of the fund’s value. It also has a share of ownership in OMV Petrom.

Fondul Proprietatea is already listed in London, Bucharest

Fondul Proprietatea is already listed on stock exchanges in London and Bucharest. It seeks such a dual listing for Hidroelectrica as well, by the fourth quarter, but the Government of Romania said it wants a domestic IPO.

CEO Badea: The IPO will benefit the economy and give the opportunity to Romanians to become shareholders in Hidroelectrica

“It is a natural step for a company of the size of Hidroelectrica, a new stage that we have been anticipating and waiting for a long time. We are convinced that the listing will strengthen the company’s position and further transparency, and will also make a serious contribution to increasing the liquidity of Bucharest Stock Exchange, with positive implications on the national economy. I would like to emphasize that the listing opens up new opportunities, including for the Romanians who wish to buy and own shares in one of the strongest companies with a majority state capital,” Chairman of Hidroelectrica’s Management Board Bogdan Badea said.

The government earlier suggested Hidroelectrica would issue new shares, as the company got approval in June for its EUR 5.3 billion investment strategy until 2037. In any case, the current setup for the IPO would still make it the biggest in Romania’s history.

IPO could be worth over EUR 1.5 billion

Portfolio Manager of Fondul Proprietatea Johan Meyer recently valued Hidroelectrica at more than USD 10 billion and said a stock market listing would boost it by 10% to 15%. It means the IPO could be worth more than EUR 1.5 billion.

Hidroelectrica’s spending plan envisages massive investment in onshore and offshore wind, solar power and biomass-fired plants and improving its existing facilities. It is working on a green hydrogen project and in 2020 it bought a 108 MW wind park in the southeastern province of Dobruja (Dobrogea).

The utility has more than 200 production units in its portfolio with a total capacity of 6.6 GW.

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