Romania’s government has separated the core activity of power distribution company Electrica from its non-viable services units, placed the latter under insolvency and settled the arrears issues in the preparations to soon operate a 51% IPO at the firm, the head of the privatisation body, Gabriel Dumitrascu, told the Bursa daily.

The IPO will take place in the first half of June after an official announcement at end-May, Dumitrascu said. Romania will thus observe the privatisation calendar drafted under the agreement with the IMF.

Electrica is fully-owned by the government and has RON 2bn [EUR 450mn] of equity at book value. The company’s capital will be increased by 105% and the new shares issued will be sold to investors. The government expects some USD 400-500mn for the 51% stake – and plans to leave the money in Electrica’s accounts for further investments.

The legal registration of the company that will be subject of the IPO is expected within 2-3 weeks, Dumitrascu said. There will be a dual listing of Electrica’s shares, however, he added, explaining that the parallel trade of the shares on the local and on a foreign market minimises the possibility of speculations.

The government is close to incorporating separately the company that manages the minority shares in already privatised regional power distribution companies and will keep under the Electrica ownership only the three regional distribution firms that have not been privatised yet.