Romania’s government has sold under an IPO 15% of national natural gas company Romgaz for RON 1.7bn [EUR 383mn], news agency Mediafax announced. The state is now left with 70% in the company and the remaining 15% belong to the Property Fund.

The share price in the IPO was RON 30 – close to the upper end of the RON 24-32 indicative target asked by the government. A 36% portion of the 15% IPO [5.4% of the company’s shares] was sold under a GDR mechanism in London at a price of USD 9.25 per GDR. Out of the total shares and GDRs, 40% was sold to residents and 60% to non-residents.

The IPO was heavily oversubscribed. Government officials admitted that they have underestimated the total demand, the smaller investors and the local market. But they claimed that the intermediaries have insisted on an even smaller indicative prices.

The GDR issue in London has stimulated the demand for shares also, they explained, adding that the strategy would be followed in the coming IPOs at other key energy companies like Hidroelectrica. The portion allotted to GDR was set at only 36% even though 63% of the demand [for shares and GDRs] was placed for GDRs. Better terms should have been offered to smaller investors – like capping the size of demands on the portion dedicated to them, the officials admitted.

Investors placed orders worth EUR 2.8bn – out of which 204 large investors offered EUR 1.7bn and 11,903 small investors offered EUR 1.1bn. Finally, the government increased the share allotted to smaller investors from 15% to 20% [of the total 15% IPO]. The oversubscription rate for small investors was still 17.7 times.