PM Ponta who attended the event: This successful IPO is a positive message on the trend of the Romania economy, the structural reforms initiated, the privatisations and the openness of the Romanian economy.
Romanian electricity distributor Electrica’s shares were up 2 percent in early trading on their debut on the Bucharest Stock Exchange (BVB) on Friday, July 4. The company’s GDRs also started trading on the London Stock Exchange (LSE). Electrica’s shares opened their first day of trading at RON 11.11 which is 1 percent above the price at which the company sold its shares in the initial public offering ended June 25, which was RON 11.
After the first half an hour of trading, the price went up to RON 11.26 per share, which is 2.36 percent above the initial public offering (IPO) price. By 12:00 the shares were trading at RON 11.2. At this price, the company is valued at EUR 883 million, which makes it the sixth most valuable Romanian company listed on BVB.
Electrica sold 51 percent of its own shares in an IPO which took place between June 16 and June 25. The company raised EUR 444 million, selling its shares at the minimum price of its IPO range, which was RON 11. Some 21 percent of the shares were allotted to individual investors and the other 79 percent were given to institutional investors. One fifth of the IPO was allocated for global depository receipts (GDRs) which are traded in London.
The IPO of Romania’s electricity distributor Electrica, the first state-owned company to privatize by selling a majority stake on the capital market, shows the commitment of the Romanian Government to continue structural reforms and the opening of the economy, prime minister Victor Ponta said in his speech at the opening bell ceremony that marked Electrica’s debut on LSE, just like he did in November 2013 for Romgaz’ listing, together with Minister Delegate for Energy Razvan Nicolescu.
“This is a positive message for the direction of the Romanian economy, for the structural reforms that we have started, for the privatization and opening of the economy,” said Victor Ponta, who opened the LSE for the second time in the last six months, after doing this back in November for the listing of Romgaz, Romania’s largest gas producer. “Now we must prepare something for November,” Ponta added.
“Electrica’s listing was a great effort. The fact that we made a majority privatization on the capital market was possible first of all because the Prime Minister wanted to make a strong example for the modernization of Romania’s economy,” said in his turn Gabriel Dumitrascu, the head of the privatization office in the Energy Department. Dumitrascu coordinated the Electrica listing on behalf of the state.
Trades of nearly RON 60 M on BVB
The opening in London was simultaneous with trading opening for Electrica’s shares on BVB, which was attended by officials from Romania’s Energy Department. They said that the record amount which the company raised on the capital market demonstrates that international investors are interested in Romania. They also promised that the next IPO of a state owned company, the one of electricity producer Hidroelectrica, will be even more spectacular.
Trade on the BVB on Friday stood at RON 112.574 million, RON 59.935 million of which were trades in Electrica shares. The BET Plus index reflecting the developments in the 37 most liquid stocks closed down 0.55 per cent, while the BET-FI index of the financial investment companies (SIFs) declined 0.56 per cent. Trade was conducted in shares issued by 50 companies, 12 of which appreciated and 31 depreciated. The BET index The BET index reflecting the developments in the 10 most liquid stocks was down 0.65 per cent, while the BET-XT blue-chips index of the 25 most liquid companies declined 0.67 per cent, and the BET-NG index of energy and utilities companies declined 0.11 per cent. The BET-BK index reflecting the yields of the investment funds went down 1.36 per cent.
Hidroelectrica’s listing to be stronger and more spectacular
The stock exchange listing of energy producer Hidroelectrica will be more spectacular than Electrica’s, Gabriel Dumitrascu, Director General of the General Department for Privatization and State Ownership Administration added. ‘I assure you that Hidroelectrica’s listing will be stronger and more spectacular that Electrica’s,’ Dumitrascu said. Hidroelectrica launched insolvency proceedings in February 2014. According to estimates of Hidroelectrica’s official receiver Remus Borza, the company could emerge from insolvency most likely by mid-2015.
Archdiocese of Cluj among the buyers
The Archdiocese of Cluj purchased SC Electrica shares after selling part of the Proprietatea Fund bonds received as compensation for its buildings and land properties that were abusively taken. One of the reasons invoked for the purchase was to develop social projects. Sorin Calea, Economic Counselor of the Vadu, Feleac, and Cluj Archdiocese, told a Mediafax reported on Friday that the number of Electrica shares and the corresponding price are “confidential.”