March 31 (SeeNews) - Romanian majority state-owned hydro power producer Hidroelectrica said the government on Thursday approved a planned initial public offering (IPO) of an up to 19.94% stake in the company held by investment fund Fondul Proprietatea [BSE:FP].
The IPO is a much-awaited natural step for a company the size of Hidroelectrica that will strengthen the company's position and transparency and will also seriously contribute to increasing the liquidity of BVB, with positive implications for the national economy, Hidroelectrica said in a press release.
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Hidroelectrica exited insolvency in April 2017, which paved the way for its listing on the Bucharest Stock Exchange, expected to be the biggest IPO in Romania’s history. The offering of a stake of 10% to 15% in Hidroelectrica is expected to raise up to 1 billion euro, the court-appointed administrator of the company said at the time.
In May 2020, Hidroelectrica announced that it has selected STJ Advisors Group Limited as equity advisor and Dentons Europe SPARL as legal advisor on the planned IPO.
Hidroelectrica is 80.06% owned by the Romanian state, while investment fund Fondul Proprietatea owns 19.94%. The company has in its portfolio 209 hydro power plants with a total installed capacity of 6,482 MW. The company also operates a 108 MW wind farm in the eastern county of Constanta.
In June 2021, the company got its shareholders' approval for an ambitious 26 billion lei (5.8 billion/$5.3 billion euro) investment programme until 2037 featuring plans for new power generation facilities using wind, solar and biomass energy sources, as well as upgrade of existing production facilities. Out of the total sum which is to be invested, 10.8 billion lei are expected to come from the IPO.
(1 euro=4.9466 lei)
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