By Edwig Ban
Fondul Proprietatea will list, “as soon as possible”, at least 15% of the shares of the state company Hidroelectrica, the largest energy producer in Romania, on the Bucharest Stock Exchange, Energy Minister Virgil Popescu told Reuters on Friday, according to Agerpres.
Last year, Romania undertook to list 15% of Hidroelectrica’s shares by June 2023, within the objectives agreed with the European Union and included in the National Recovery and Resilience Plan (PNRR).
Fondul Proprietatea owns 20% of Hidroelectrica, and the Romanian state has an 80% stake, but in 2020, the Parliament launched a two-year ban on the sale of shares of state-owned companies, claiming that the move would be against national interests, given in which the pandemic could lower the share price.
So far, the Bucharest government has focused on selling part of its stake in Hidroelectrica, so Virgil Popescu’s statements signal a change in strategy to speed up an initial public offering (IPO).
“The Parliament’s ban does not allow us to launch an IPO, but we support the listing of the entire participation of Fondul Proprietatea (FP) or part of it, at least 15%, on the Bucharest Stock Exchange. We will vote for it,” said Virgil Popescu.
Johan Meyer, portfolio manager at Fondul Proprietatea, said this week that the Fund’s priority is to list Hidroelectrica.
“Our main goal is an IPO for Hidroelectrica and to do so as soon as possible because the company is in a great position to benefit from a listing on the Bucharest Stock Exchange,” Meyer said. According to him, the package of shares and the timing of the offer would be influenced by market interest and conditions.
Out of insolvency in 2017, Hidroelectrica produces almost 30% of Romania’s electricity, with green energy supplied by 200 hydropower plants.
Launched in December 2005, Fondul Proprietatea was created to compensate citizens whose property was confiscated by the former communist regime. Fondul Proprietatea is a closed-end investment company, and its investment objective is to maximize returns to shareholders and increase the value of net assets per share through investments made mainly in Romanian shares and securities.
Fondul Proprietatea has a capitalization of 3.1 billion dollars, and the 20% package of Hidroelectrica shares is responsible for more than half of the total, with a value of 1.97 billion dollars.
Johan Meyer says that, due to the moratorium, the Romanian state has allowed Hidroelectrica’s minority shareholders to go ahead with the listing procedures, as the current Government has not been able to change in Parliament the law banning the sale of state shares. Meyer added that Fondul Proprietatea has already obtained the agreement in principle to list its participation in the salt producer Salrom.
“We can use a similar approach with other companies in our portfolio,” Johan Meyer told Reuters.
By Edwig Ban