Hidroelectrica, known as the pearl of Romanian energy, is taking an important step towards listing on the Bucharest Stock Exchange: an initial public offering (IPO). This is the news of the year for the Romanian economy. If successful, it will be listed on July 12 under the symbol H2O (chemical formula for water).

Romanians can sign up from June 23 to July 4 at 12:00 p.m.

View Hidroelectrica’s listing prospectus – click to open

This is the largest IPO in the history of the Romanian capital market.

The offer includes an offer to sell Fondul Proprietatea up to 78,007,110 shares, i.e. 17.34%.

The expected level of the Offer, including any over-allotment option, is up to 89,708,177 Offered Shares to be sold to Fondul Proprietatea, representing up to 19.94% of its holding in the issued share capital of Hidroelectrica.

The proposal is divided into two parts:

1. 11,701,067 shares (which is 15% of the number of Offered Shares) addressed through a public offer in Romania to retail investors, i.e. designated natural persons

2. 66,306,043 Offered Shares (which is 85% of the number of Offered Shares), offer addressed to institutional investors

How much does it cost to subscribe to shares / How much do they cost

The price is 94-112 lei, the final price will be announced on the allocation date, July 5.

This means capitalization from 42.281 billion lei to 50.377 billion lei (from 8.524 billion euros to 10.156 billion euros).

Retail investors are entitled to a 3% discount for purchase orders registered within the first five business days.

If you wish to subscribe, you should be aware that Hidroelectrica intends to distribute as ordinary dividends at least 90% of its annual net profit starting from the financial year immediately following the Offer.

Three groups of Romanian institutional investors have agreed to be lead investors in the Offer and have entered into an investment agreement with Hidroelectrica and the Fund. They undertook to purchase shares for a total of 2.24 billion lei at the offer price.

What does Hidroelectrica’s listing mean?

We remind you that the company’s shares are quoted not by the state, but by Fondul Proprietatea. The state will benefit from the PNRR milestone being met and from being a 5.97% shareholder in FP.

What do governors “lose” by recounting? Well, the company will be transparent. We will know what contracts are signed, with whom and so on. Everything the company does will be public. This is good for society.

Hidroelectrica’s listing will bring the Romanian capital market to emerging market status. This means that more foreigners will invest in Romania, as many funds have allocated a certain percentage to such markets.

As a reminder, Fondul Proprietatea owns almost 20% (19.94%) of Hidroelectrica.

What profit did Hidroelectrica record in previous years and in the first quarter

In 2022, 2021 and 2020, Hidroelectrica had a consolidated revenue of 9.452 billion lei, 6.489 billion lei and 3.841 billion lei, respectively.

In the same period, the company reported annual (net) profits of 4.464 billion lei, 3.116 billion lei and 1.558 billion lei, respectively.

In the first quarter of 2023, the Company had a consolidated revenue of 3.272 billion lei, which was obtained due to an increase in the total volume of energy sold (4.838 GWh in the first quarter of 2023) in both the generation and supply segments. This resulted in achieving total adjusted EBITDA of 2.184 billion lei and net profit of 1.723 billion in the first quarter of 2023, compared to total adjusted EBITDA of 1.702 million lei and reported net profit of 1.287 billion lei in the first quarter of 2022.

Hidroelectrica is the largest energy producer in Romania. The group owns and operates 182 hydroelectric plants, five pumping stations and a wind farm, which are strategically located in eight branches organized geographically on the territory of Romania.

The company owns a 100% renewable generation portfolio with 6.3 GW of installed hydropower and 108 MW of installed onshore wind capacity at the Crucea wind farm.

Hidroelectrica is one of the largest producers of hydropower in Europe, with the volume of electricity produced from hydroelectric power plants in 2022 – 13.6 TWh, in 2021 – 16.9 TWh, in 2020 – 15 TWh (all they are gross output). Production in 2022 reflects less favorable hydrological conditions due to severe drought.

At the same time, Hidroelectrica supplies electricity to the wholesale and retail electricity markets.

The Company’s market share of electricity supplied to retail customers increased from 1.3% in 2020 to approximately 8% in December 2022, and the number of customers increased from 2,465 in 2020 to over 482,000 in 2022.

If the offer is successfully completed, Hidroelectrica will be included in the BET, BET-TR, BET-TRN, BET-XT, BET-XT-TR, BET-XT-TRN, BET-BK, BET-NG and BET Plus indices. from the first trading day.