A group of shareholders of Romanian diversified telecoms group RCS&RDS want to sell 20%-30% of the group’s shares in an IPO, Ziarul Financiar daily reported. The IPO is expected to take place in May. 

The value of the company is evaluated at €1.5bn-2bn, so the IPO size is consequently expected at €500mn-600mn. It would follow the December 2016 IPO of healthcare provider Medlife, the first of Romanian private company since the onset of the recent crisis. 

RCS&RDS, founded in the 1990s by local entrepreneur Zoltan Teszari as a TV cable services provider, diversified into internet services in the 2000s and ten years later into mobile voice and data services. It is still controlled by its founder who, however, currently owns only 47% of the shares, according to ZF daily. In its most recent strategic diversification, the company entered the power supply services market and wants to develop its own distribution networks.

In 2016, Standard & Poor's confirmed the long-term rating for the debt issued by RCS&RDS and its parent company CCS, and raised the outlook to positive from neutral.

In January-September last year, the group, which operates on foreign markets (Hungary, Spain and Italy) as well as in Romania, reported €617mn revenues. The company featured high indebtedness though, with a total net debt of €708mn.

The total debt of RCS&RDS hit RON4.4bn (nearly €1bn) at the end of 2015, more than the combined debt of the two largest telecom operators Orange and Vodafone. The debt decreased through 2016 and the company issued bonds in October 2016 to re-finance part of the debt.

Demand exceeded supply three times for the RON1.43bn (€318) bond denominated in local currency, carrying a 5% coupon. The demand was only twice as high as supply for the €375mn bond denominated in euros, carrying a 3% coupon.

The company’s indebtedness remained the same after the issue of the bonds, which were aimed at re-financing the company’s debt. However, the share of debt denominated in euros decreased from 65% to 40%, Standard & Poor’s commented on October 11.