April 1 (SeeNews) - Romanian investment fund Fondul Proprietatea [BSE:FP] said on Friday that it plans to launch a initial public offering (IPO) of 15% interest in majority state-owned hydro power producer Hidroelectrica by the end of the year, seeking to raise 10.4 billion lei ($2.3 billion/ 2.1 billion euro).
The planned Hidroelectrica's IPO is estimated to be the largest offering in the history of a Romanian company, Fondul Proprietatea (FP) said in a press release on Thursday.
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A dual listing of Hidroelectrica should be pursued on the Bucharest Stock Exchange as the main market, and a suitable international market, such as the London Stock Exchange, the investment fund added.
In the fund's view, the dual listing of Hidroelectrica is critical in order to achieve the listing of 15% of the shares of Hidroelectrica and in the absence of such a listing, the main risk is that the size of the transaction would have to be reduced, with negative impact on the value of the company and the further evolution of the share price post-listing.
Further on, a successful dual listing will help the government to fulfil the requirement under the National Resilience and Recovery Plan to list a stake of at least 15% of Hidroelectrica by June 30, 2023.
"We see the dual listing of Hidroelectrica as the culmination of all our efforts thus far and an opportunity to put Romania on the global radar of all institutional investors, and admission to trading on a suitable international secondary market will further attest that the Company adheres to the strictest international corporate governance standards," said Marius Dan, deputy CEO of Franklin Templeton Bucharest, Fondul Proprietatea portfolio manager.
On Thursday, Hidroelectrica announced that the Romanian government approved a plan to launch an IPO of an up to 19.94% stake in the company held by Fondul Proprietatea.
Hidroelectrica exited insolvency in April 2017, which paved the way for its listing on the Bucharest Stock Exchange.
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 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.
Fondul Proprietatea's shares traded 1.18% higher at 2.1350 lei on Friday as at 1018 CET on the BVB.
(1 euro=4.9466 lei)
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