The Romanian government has authorized Fondul Proprietatea, the minority shareholder of Hidroelectrica, to make an initial public offer of at least 15% of the capital of the public operator of the hydroelectric plant. The investment fund wants a dual listing, in Bucharest and London, but Romania prefers a purely national IPO.
After several unsuccessful attempts, the renewable energy producer Hidroelectrica is once again preparing to go public. Romania’s flagship hydroelectric producer, 80.1% owned by the government, has been given the 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 (PNRR or PNRR in Romanian), local media reported. Fondul Proprietatea, which has a 19.9% stake, has long been pushing for an IPO. The shares in the investment fund are those that would be offered as Romania blocked the sale of state assets, although the two-year freeze expires soon.
The government also has a small stake in Fondul Proprietatea. The Hidroelectrica position accounts for most of the fund’s value. It also holds a stake in OMV Petrom.
Fondul Proprietatea is already listed in London, Bucharest
Fondul Proprietatea is already listed on the London and Bucharest stock exchanges. It is also seeking such a dual listing for Hidroelectrica, by the fourth quarter, but the Romanian government has said it wants a domestic IPO.
CEO Badea: The IPO will benefit the economy and give Romanians the opportunity to become shareholders of Hidroelectrica
“This is a natural step for a company the size of Hidroelectrica, a new step that we anticipate and expect for a long time. We are convinced that the listing will strengthen the company’s position and its transparency, and will also make a serious contribution to increasing the liquidity of the Bucharest Stock Exchange, with positive implications for the national economy. I would like to emphasize that the listing opens up new opportunities, including for Romanians who want to buy and own shares in one of the strongest companies with majority state capital,” said the Chairman of the Board of Directors of Hydroelectrica, Bogdan Badea.
The government had earlier suggested that Hidroelectrica would issue new shares, as the company won approval in June of its €5.3 billion investment strategy through 2037. In any case, the current setup of the IPO would still make it the biggest in Romanian history.
The IPO could be worth more than 1.5 billion euros
Fondul Proprietatea portfolio manager Johan Meyer recently valued Hidroelectrica at over $10 billion and said an IPO would boost it by 10-15%. This means that the IPO could be worth more than 1.5 billion euros.
Hidroelectrica’s spending plan includes massive investments in onshore and offshore wind, solar and biomass power plants and upgrading its existing facilities. It is working on a green hydrogen project and in 2020 bought a 108 MW wind farm in the southeastern province of Dobruja (Dobrogea).
The utility has over 200 generating units in its portfolio with a total capacity of 6.6 GW.