Romania's Financial Supervisory Authority (ASF) endorsed on June 22 the Prospectus filed by a syndicate of banks on behalf of Hidroelectrica (BVB: H2O) for the initial public offering (IPO) of a stake of up to 17.34% put up for sale by Fondul Proprietatea.

Probably the most important event after Bucharest Exchange was re-opened in 1995, the IPO is expected to greatly increase Romania's equity market and hopefully its liquidity.

The subscription period is expected to begin on June 23 and expire eight working days later on July 4. The outcome will be announced on July 5, and the shares will be transferred to the buyers on July 10 – two days before they are available for trading at Bucharest Exchange (BVB).

Fondul Proprietatea puts up for sale 78 mln shares or a 17.34% stake out of its entire 19.94% participation. Depending on the demand, FP may decide to sell its entire stake (89.7 mln shares), though. This option will be decided by the syndicate of Global Coordinators within 30 days after the shares are listed.

Three groups of Romanian institutional investors ("main investors") pledged to buy at least RON 2.24 bln worth of shares (i.e. at least 20 mln shares, or 4.44% of Hidroelectrica), according to the Prospectus.

Hidroelectrica was evaluated at between RON 42.3 bln and RON 50.4 bln (EUR 8.5 bln to 10 bln), i.e. between 8.6 times and 10.2 times the net profit registered in the last 12 months (Q2/2022 – Q1/2023), according to the Prospectus. 

The price for the individual investors who were earmarked a 15% tranche was set at RON 112 per share with a 3% discount for the first five working days of the subscription period. The price range for institutional investors was set between RON 94 and RON 112 per share. Assuming that the entire 17.34% stake is fully subscribed at the maximum price of RON 112 per share, Fondul Proprietatea would get RON 8.8 bln (nearly EUR 1.8 bln) for the shares. 

Hidroelectrica and FP will be subject to a prohibition of alienation of Hidroelectrica's shares for a period beginning on June 22, 2023, and ending 180 days from the date of admission (listing).

The majority shareholder (the state) will be subject to a prohibition of alienation of the company's shares for a period beginning on June 22, 2023, and ending 12 months after the date of admission, subject to certain exceptions provided for in the Prospectus.

iulian@romania-insider.com

(Photo source: Facebook/Hidroelectrica)