The listing of water power corporation Hidroelectrica is needed for the Romanian capital market to upgrade to the status of emerging market, and the Romanian state will be the main beneficiary of this promotion, Chairman of the Bucharest Stock Exchange (BVB) Administration Board Lucian Anghel told the 6th edition of the Individual Investors Forum on Saturday.
OMV Petrom, Romgaz, Banca Transilvania are also on the list of companies that are eligible for promoting Romania from frontier to emerging market.
“The size requirement of 1.3 billion dollars, the free float of 630 million dollars are conditions set so high by the rating agencies that we can’t find companies this size other than in the state’s yard. And the state is the main beneficiary of the upgrade from frontier to emerging market. That’s what we need Hidroelectrica for,” said Lucian Anghel.
The Chairman of the Bucharest Stock Exchange Administration Board explained that acquiring the emerging market status would help increase the value of companies.
“On other markets that have been upgraded from frontier market to emerging market the median evolution of the price of the shares in the main index increased between 40-50 pct and 200 pct. It’s a fantastic growth in a period of two years. This is a once in a lifetime situation and if we succeed, the value of Romanian companies is supposed to increase. The state should benefit because it controls the major listed companies. And then there are also more than six million Romanian who invested in pillar II and III pension funds, who will benefit too from the stock value increase. It is a win-win for everyone,” stressed Lucian Anghel.
IMF’s Baqir: “Speeding-up IPOs such as Hidroelectrica can raise Romania to emergent market status”
Listing companies owned by the state such as the Hidroelectrica would raise Romania to the status of emergent market, and the cost of lending would drop, head of the International Monetary Fund (IMF) mission in Romania Reza Baqir told a press conference on Friday.
He said that the enterprises of the state (SOE) were part of their programme for some time. Moreover he stated that the progresses within the privatization process stagnated and added that it’s essential for reforms in these area to be sped-up. He talked about the fast implementation of the provisions of the Law No.111/2016 regarding the corporative governance, that also refers to the boost of some IPOs that are taken into account, such as the Hidroelectrica, where the next step is the appointment in April of the Supervision Council. He added that such IPOs if successful would contribute very much to the raise of Romania as an emergent country by the investment banks, this thing having many benefits for Romania, including the cut of lending cost.
The shareholders of the Hidroelectrica recently extended until 7 August 2017 the commitment letter with the Morgan Stanley&Co International plc and Raiffeisen Capital & Investment SA brokerage syndicate, in order to list the energy producer on the stock market.
Earlier this year, the President of the Bucharest Stock Exchange (BVB), Lucian Anghel was explaining that listing the Hidroelectrica could upgrade Romania to emerging market status, and one effect would be the increase of pensions for 6 million Romanians.
In 2013, the Government decided to list the company on the BVB, by increasing the capital and launching an initial public offering for the sale of newly issued shares of a package representing 15 percent of the existing share capital before the increase.
Within this process, following an auction organized in January 2014, the the brokerage syndicate made-up of Morgan Stanley and Raiffeisen was selected, and a commitment letter was signed in February 2014.
The Romanian state owns 80 percent of the Hidroelectrica, through the Energy Ministry, and 20 percent represent shares owned by the Fondul Proprietatea.