Prepare your money: in June, the sale of Hidroelectrica shares would begin in the most anticipated listing offer in the history of the Bucharest Stock Exchange.
The most anticipated share sale offer in the post-December history of the Bucharest Stock Exchange, through which Hidroelectrica, Romania's largest electricity producer, will enter trading, is to begin in the first part of June, I claim many sources of the Financial Newspaper.
Thus, during several days in June 2023, most likely around 10-18 days, the initial public offering (IPO) of Hidroelectrica will be launched on the Bucharest Stock Exchange, meaning that investors will be able to subscribe to shares in a company that in 2022 it had business of 9.1 billion lei and a net profit of 4 billion lei, i.e. a profitability margin of 44%.
The ZF sources could not mention for the moment what the package of shares put up for sale will be, if it will be 10% or the full 20% ownership of Fondul Proprietatea. Based on the 20% holding, Hidroelectrica's offer is valued at approximately 2 billion euros and thus has quite a good chance of surpassing Electrica's record, ie 444 million euros, from 2014.
Depending on the valuation and the interest of investors, Hidroelectrica could even break the Eastern European record for the largest IPO, currently held by Allegro, Poland's "eMag", with 2.3 billion euros in the fall of 2020.
At the beginning of March, ZF wrote that 80 people, including bankers, lawyers, technical and financial consultants, work in the offices in London and Bucharest for the documentation related to the listing.
About 60 of them are lawyers and bankers from the intermediary consortium from high-profile banks such as Citi, JPMorgan, Jefferies, Bank of America, UniCredit, but also from Bucharest such as BT CP, Erste, Wood, Swiss Capital. About 20 other people are the technical and financial consultants of the offer.
The brokerage syndicate, banks, companies, brokers and all those involved in the Hidroelectrica IPO could receive approximately 80 million euros, according to a ZF analysis that took into account consulting costs for previous BSE listings based on the total value of the offer.
Fondul Proprietatea will collect the money from the listing, which it says it will distribute to investors, including the Ministry of Finance, but mostly Pillar II pension funds. Neither the Romanian state, which owns 80% of Hidroelectrica, nor the company will take any money. The documentation that around 80 people are working on consists of the preparation of the listing prospectus, the financial history of the company, the establishment of the allocation of tranches between retail and institutional, the evaluation and the price of the company, and will most likely have around 400-500 pages.
For comparison, the prospectus of Electrica, the largest listing so far from BVB, of 1.95 billion lei in 2014, has 512 pages. Digi's 670 pages, One United 192 pages, TTS 276 pages.
Practically, this is the most important step in the preparation of a listing, as it is the first interaction between an investor and the respective company, a dissection of the financial situation and future plans.
Future retirees, quality buyers
Eight million employees, i.e. those who contribute monthly 3.75% of their gross income for the private management of their old age savings, could become the second largest shareholder of Hidroelectrica after the Ministry of Energy on the basis of a legislative amendment that doubles the exposure that Pillar II can take it to the state company.
And that's because the legislation was recently changed and the funds can invest in a single company up to 10% of the value of their assets, compared to 5% until now. Thus, both the investment from the initial public offering (IPO) and the holding in the company were increased.
Through the law regarding the approval of the Government's Emergency Ordinance no. 174/2022, initiated at the end of last year by the Financial Supervisory Authority, it is shown, among other things, that the limit is increased from 5% to 10%, but only in that company does the Romanian state have a holding greater than or equal to 50%.
In other words, at least on a theoretical level, P2 funds can take 90% of the IPO, compared to 40% as it was through the 5% limit, and they can end up owning 18% of Hidroelectrica, compared to almost 8% as it would have been for example last year.
Link: https://www.zf.ro/burse-fonduri-mutuale/exclusiv-zf-pregatiti-va-banii-in-iunie-ar-urma-sa-inceapa-vanzarea-21827372aThus, during several days in June 2023, most likely around 10-18 days, the initial public offering (IPO) of Hidroelectrica will be launched on the Bucharest Stock Exchange, meaning that investors will be able to subscribe to shares in a company that in 2022 it had business of 9.1 billion lei and a net profit of 4 billion lei, i.e. a profitability margin of 44%.
The ZF sources could not mention for the moment what the package of shares put up for sale will be, if it will be 10% or the full 20% ownership of Fondul Proprietatea. Based on the 20% holding, Hidroelectrica's offer is valued at approximately 2 billion euros and thus has quite a good chance of surpassing Electrica's record, ie 444 million euros, from 2014.
Depending on the valuation and the interest of investors, Hidroelectrica could even break the Eastern European record for the largest IPO, currently held by Allegro, Poland's "eMag", with 2.3 billion euros in the fall of 2020.
At the beginning of March, ZF wrote that 80 people, including bankers, lawyers, technical and financial consultants, work in the offices in London and Bucharest for the documentation related to the listing.
About 60 of them are lawyers and bankers from the intermediary consortium from high-profile banks such as Citi, JPMorgan, Jefferies, Bank of America, UniCredit, but also from Bucharest such as BT CP, Erste, Wood, Swiss Capital. About 20 other people are the technical and financial consultants of the offer.
The brokerage syndicate, banks, companies, brokers and all those involved in the Hidroelectrica IPO could receive approximately 80 million euros, according to a ZF analysis that took into account consulting costs for previous BSE listings based on the total value of the offer.
Fondul Proprietatea will collect the money from the listing, which it says it will distribute to investors, including the Ministry of Finance, but mostly Pillar II pension funds. Neither the Romanian state, which owns 80% of Hidroelectrica, nor the company will take any money. The documentation that around 80 people are working on consists of the preparation of the listing prospectus, the financial history of the company, the establishment of the allocation of tranches between retail and institutional, the evaluation and the price of the company, and will most likely have around 400-500 pages.
For comparison, the prospectus of Electrica, the largest listing so far from BVB, of 1.95 billion lei in 2014, has 512 pages. Digi's 670 pages, One United 192 pages, TTS 276 pages.
Practically, this is the most important step in the preparation of a listing, as it is the first interaction between an investor and the respective company, a dissection of the financial situation and future plans.
Future retirees, quality buyers
Eight million employees, i.e. those who contribute monthly 3.75% of their gross income for the private management of their old age savings, could become the second largest shareholder of Hidroelectrica after the Ministry of Energy on the basis of a legislative amendment that doubles the exposure that Pillar II can take it to the state company.
And that's because the legislation was recently changed and the funds can invest in a single company up to 10% of the value of their assets, compared to 5% until now. Thus, both the investment from the initial public offering (IPO) and the holding in the company were increased.
Through the law regarding the approval of the Government's Emergency Ordinance no. 174/2022, initiated at the end of last year by the Financial Supervisory Authority, it is shown, among other things, that the limit is increased from 5% to 10%, but only in that company does the Romanian state have a holding greater than or equal to 50%.
In other words, at least on a theoretical level, P2 funds can take 90% of the IPO, compared to 40% as it was through the 5% limit, and they can end up owning 18% of Hidroelectrica, compared to almost 8% as it would have been for example last year.
