Romania, FP argues for Hidroelectrica’s dual listing

, SEE Energy News

After the shareholders of electricity producer Hidroelectrica have approved the initiation of the listing of the company’s shares on the Bucharest Stock Exchange (BVB), following a public offering of the shares held by private investment fund Fondul Proprietatea (FP), the fund said that it will advocate for dual listing of Hidroelectrica’s shares, both on the BVB and other renowned stock exchange, such as the London Stock Exchange.

FP said that it trusts that the Ministry of Energy as the majority shareholder of Hidroelectrica will give further consideration to the fund’s recommendation for a dual listing of the company.

The reasons provided by FP for the dual listing may or may not be justified, but in principle, there are no reasons for the Government to deny the seller’s right to choose a secondary market. But it is clear that what may be a successful initial public offering for FP may later turn into losses for investors if the price sees a sharp post-listing negative correction.

FP needs a dual listing in order to quickly cash its shares, preferably at a high price. For a 15 % stake, the fund estimates a value of the deal of around 2.3 billion dollars.

FP also said in its press release that it expects to complete the listing by the end of the year.

In early 2022, Minister of Energy Virgil Popescu said that the private investment fund Fondul Proprietatea (FP) will list at least 15 % of shares of majority state-owned electricity producer Hidroelectrica on the Bucharest Stock Exchange as soon as possible, without waiting for the Government to join in. FP currently holds 20 % stake in Hidroelectrica.

Hidroelectrica’s IPO has been expected for many years. In April 2012, a consortium made of BRD, Citigroup, Societe Generale and Intercapital Invest was selected to manage the sale of a 10 % stake in Hidroelectrica, but the company went into insolvency a few months later.

After Hidroelectrica completed its restructuring process, in January 2014, the Government carried out another selection process and chose Raiffeisen Bank and Morgan Stanley to manage the sale of a 15 % stake in Hidroelectrica through IPO. However, this sale did not take place.