Electrica's IPO is ongoing
Source: www.electrica.ro

Electrica launched the IPO for 51 percent of its share capital, the largest initial public offering ever on the Bucharest Stock Exchange which is being run between June 16 and June 25, 2014.

The offering comprising about 177.2 million new shares will be launched both on the Bucharest Stock Exchange, in the form of shares and the London Stock Exchange with corresponding Global Depository Receipts, with one GDR representing an interest in four shares.

These shares accounting for 105 percent of the existing capital have a price ranging from 11 lei to 13.5 lei (13.55 dollar to 16.63 dollar per GDR), hence the minimum amount the Romanian state will get, provided the IPO will be fully subscribed, is nearly 2 billion lei (about 435 million euro).

Subscriptions in the small investors’ segment must comprise of at least 250 shares and a maximum of 20,000 shares at the upper price range, 13.5 lei. Large investors, though, are restricted only as regards the minimum threshold which was set to 20,001 shares and 5,001 GDRs, the price being 13.5 lei/share and 16.63 dollar/GDR, respectively.

Institutional investors can subscribe for as many shares as they want, without restrictions as concerns the price, too, therefore subscriptions can be placed even for 11 lei and can range up to 13.5 lei for shares (13.55 – 16.63 dollar/GDR).

From the total shares available in the offering, 85 percent are for large investors, while the remainder of15 percent was assigned to retail investors, either small or large, yet this allocation is not definitive, allowing a redistribution to supplement the shares up to 20 percent for the second category. 

As happened with Romgaz’s IPO last fall, there will be some discounts applied, so those who acquire between 1000 and 20,000 shares in the first week, will pay less by 5 percent/ share.

While subscriptions are set to be carried out on June 26, the effective listing on the BSE and the LSE is expected to start on July 3. Citigroup Global Markets Limited, Raiffeisen Bank S.A., Societe Generale Corporate and Investment Banking, BRD Group Societe Generale S.A. and SSIF Swiss Capital act as agents of the IPO.

Romania's Financial Supervisory Authority (ASF) approved last week the prospectus of Electrica’s IPO, after the Government had passed earlier the bill in connection with the privatization strategy of the electricity distributor and supplier controlled by the Ministry of Economy.

Electrica is the leading distributor and supplier of electricity in Romania. The group's core business segments are the supply and distribution of electricity, in the first area operating through Electrica Distributie Muntenia Nord S.A., Electrica Distributie Transilvania Sud S.A., Electrica Distributie Transilvania Nord S.A. and the maintenance services company Electrica Serv. The supply segment operates through Electrica Furnizare and supplies electricity to consumers both on the regulated electricity market (in the regions where the distribution subsidiaries of the group operate) and on the competitive electricity market (throughout Romania).

The group's electricity distribution business is the largest in the domestic market both in terms of volume of electricity distributed to users and number of users.  According to ANRE, the National Energy Regulatory Authority, in 2013 the Electrica’s distribution business accounted for 39 percent of the electricity distributed in Romania – some 16 TWh of electric power which was distributed to about 3.6 million users. The supply operations included a similar number of users (around 3.56 million) and 9.7 TWh which represents 22.1 percent of the electric power supplied in the country.

Last year, Electrica posted consolidated revenues of approximately 5.2 billion lei (over 1.15 billion euro), while EBITDA amounted to 749 million lei (some 167 million euro).

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