Romania: Hidroelectrica’s listing could take Romania to emerging market status

7. April 2017. / SEE Energy News

Chairman of the Bucharest Stock Exchange Administration Board Lucian Anghel said in an interview that the listing of electricity producer 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.

Anghel said that 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 only state-owned companies are large enough in order to help obtain the emerging market status. He noted that there are also other companies that are eligible for promoting Romania from frontier to emerging market, such as OMV Petrom, Romgaz or Banca Translivania, but Hidroelectrica is the most likely candidate.

However, in February, Portfolio Manager of the investment fund Fondul Proprietatea Greg Konieczny said in a press conference that there has been very little progress over the past few months regarding the initial public offering (IPO) of electricity producer Hidroelectrica, while a lot of decisions have been stalled within different committees and different levels of the Government.

Hidroelectrica posted an estimated gross profit of 332.2 million euros in 2016, which is the company’s record and the highest profit announced so far by any company in Romania in 2016, said the company’s General Manager Ovidiu Agliceru. Hidroelectrica’s turnover increased by almost 65 million euros in 2016 compared to the previous year, while electricity production reached 17.2 TWh, compared to last year’s 15.9 TWh. In 2015, the company recorded a gross profit in the amount of 246 million euros.

Romanian state owns 80 % stake in Hidroelectrica through the Ministry of Energy, while private investment fund Fondul Proprietatea owns the remaining 20 % of the company’s shares.

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