The Romanian government is interested in accelerating the initial public offering (IPO) of a stake in hydropower company Hidroelectrica, Minister of Economy Toma Petcu said on September 23, quoted by Agerpres. 

The ministry envisages the sale of a 10% stake, instead of 15% previously announced, and it has drafted a note to be endorsed by the government in this regard, Petcu said. Later, the state will sell another 5% stake, he added.

The funds derived from the IPO will remain in Hidroelectrica’s budget for investments, the ministry of economy commented. Some of the generation units need investments and the company gave up maintenance, modernisation and upgrade programmes during the insolvency procedures that was completed in June 2016, Petcu explained. While boasting 6,400MW nominal generation capacity, it actually generates only 3,000-3,500MW.

“It means that the rest of capacities need retooling and modernisation in order to start producing and generating value to the company,” Petcu said.

Notably, the government as a majority shareholder in Hidroelectrica has instructed the company to pay in dividends as much as possible during this year, a strategy pursued in other state-controlled companies as well (Romgaz, Transelectrica, Transgaz). 

The government asked on September 13 for Hidroelectrica to pay RON655mn supplementary dividends after the company already disbursed more than RON1bn in dividends for the financial year 2016 thus generating nearly RON1.7bn (€370mn) of revenues to shareholders (among which the government holds a 80% stake).