Romania’s Electrica seeks EUR 435mn for 51% of its shares

By bne IntelliNews June 12, 2014

Romanian power distribution group Electrica has set a target price of RON 11 to RON 13.5 per share in the IPO for 51% of its shares, energy minister Razvan Nicolescu announced as quoted by Ziarul Financiar daily.

For the price range announced by Nicolescu, the company thus expects EUR 443mn–EUR 544mn for the new shares to be issued, not accounting for the discounts given to small individual investors. The company expects at least EUR 435mn, Nicolescu specified, possibly accounting for the effects of the discount.

The final price will be set based on the institutional investors’ demands, while small investors will be given a discount. Electrica operates three of the eight Romanian electricity distribution firms and is fully controlled by the state.

The IPO will take place on June 16-25, according to unofficial sources quoted by the daily. Company shares would be floated on July 3.

The IPO documents will be endorsed by the financial sector regulator ASF after the government’s decision on the target prices is published in the Official Journal. The IPO will be accompanied by a GDR issue in London.

The new shares, accounting for 105% of the current number of shares, would be split into two tranches, for institutional and retail investors, respectively. Retail investors are earmarked initially a 15% stake of the new shares - but their stake could be increased to 22% in case the demand is strong. Small retail investors will be guaranteed a certain minimum number of shares [1,000] to avoid the situation seen at Romgaz IPO last autumn when their offers were diminished pro-rata dramatically. Investors placing orders for 1,001-20,000 shares will be given a 5% discount.

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