Hidroelectrica IPO, an exceptional event at the Bucharest Stock Exchange. Fondul Proprietatea sells 17.34% of the shares held in the largest energy company in South-Eastern Europe

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Bucharest, June 23, 2023 – The Council of the Financial Supervisory Authority (ASF) approved, in Thursday’s meeting, the prospectus related to the public offer for sale for a number of up to 78,007,110 shares, representing 17.34% of the total number of shares issued by Hidroelectrica. The offer price is 94 lei – 112 lei per share, according to a press release from the ASF.

The offer will take place over a period of 8 working days, between June 23 and July 4, 2023, and is intended for both the retail segment and institutional investors.

After the public offer for sale, the issuing company will complete the steps started and will address the Bucharest Stock Exchange to obtain final approval in order to admit the issued shares to trading.

With a turnover of 9.12 billion lei and a profit of 4 billion lei in 2022, Hidrolectrica is one of the largest energy companies in Southeast Europe and is the largest producer of electricity in the region. The company supplies electricity to hundreds of thousands of domestic and industrial customers.

“The listing of Hidroelectrica on the Bucharest Stock Exchange is the largest in the history of our capital market and even in the region and will become a point of reference for the Romanian stock market. This approach will offer another dimension to the capital market in Romania and will attract both small as well as the big investors,” said Mr. Nicu Marcu, President of the Financial Supervisory Authority.

According to the press release, by listing Hidroelectrica, the Bucharest Stock Exchange strengthens its role at the regional level, at the same time having a significant importance both for the capital market and for Romanian investors. The entry into trading of Hidroelectrica shares also comes in the context of the adoption of the Capital Market Strategy, which supports and encourages the increase in the liquidity and attractiveness of the Romanian capital market.

After the evaluation of the status of the local capital market by FTSE Russell, which has already included Romania in the emerging markets index starting from September 2020, the listing of Hidroelectrica represents an important step towards meeting the criteria set by MSCI (Morgan Stanley Capital International) for the promotion of the local capital market capital to emerging market status.
Hidroelectrica announced at the beginning of this month, through a press release, the intention of Fondului Proprietatea to carry out an initial public offering aimed at existing ordinary shares.

According to the quoted source, the Fund received the consent of the shareholders to dispose of its entire participation in the offer, up to 19.94%, of the total number of shares issued by the company, the number of shares that will be sold in the public offer to be determined later. The company will not carry out a capital increase in the context of the offer and will not benefit in any way from the funds obtained as a result of the offer.

The approach will consist of a public offer addressed to retail and institutional investors from Romania, as well as eligible international institutional investors. The shares will be sold and, after admission, traded in lei.

According to the document, the admission is expected to take place in July 2023. Once admitted to trading, the company’s shares will be included in the BSE’s BET index. The company and the fund will be subject to a restriction on the disposal of the company’s shares for a period of 180 days, and the majority shareholder of the company will be subject to a restriction on the disposal of the company’s shares for a period of 12 months from the date of admission.

The release states that Citigroup Global Markets Europe AG, Erste Group Bank AG, Jefferies GMBH and Morgan Stanley Europe SE are acting as Joint Global Coordinators in connection with the offer. Banca Comercială Română SA, Barclays Bank Ireland PLC, BofA Securities Europe SA, UBS Europe SE, UniCredit Bank AG and Wood & Company Financial Services act as joint holders of the subscription register. Auerbach Grayson, BRD – Groupe Societe Generale, S.S.I.F. BT Capital Partners S.A. and S.S.I.F. Swiss Capital S.A. are principal joint managers.ˇ
Rothschild & Co Equity Market Solutions Limited is the Fund’s financial advisor, and STJ Advisors is the company’s financial advisor in connection with the initial public offering.

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