Published: November 10, 2023
The hydropower producer’s listing was the biggest ever to come out of Romania, and gives a major boost to the region’s capital markets.
On July 12, Romanian electricity provider Hidroelectrica made history with its €1.9bn initial public offering. The transaction was by far the largest IPO ever made on the Bucharest Stock Exchange (BVB). It was also the third largest globally this year, the largest in Europe since Porsche in September 2022, and one of the largest ever to come out of Eastern Europe.
The sale came courtesy of minority shareholder Fondul Proprietatea, an alternative investment fund managed by Franklin Templeton International Services. The fund released its entire 19.94% stake (89.7 million shares), which it had held since 2005 – and with shares selling at €21 apiece, that was enough to set the company’s valuation at a lofty €9.45bn. To put this into perspective, that represents 22% of the market cap of the entire BVB.
Hidroelectrica remains majority owned by the Romanian state, which retains its 80.06% stake. The utility is one of Europe’s largest hydropower companies, with a power capacity of 6.3GW from 182 hydroelectric plants and an installed onshore wind capacity of 108MW. Between 2018 and 2022, it contributed around 29% of Romania’s total energy mix.
Bodgan Badea, president of the Hidroelectrica Directorate, said: “[This] is certainly the most important capital market event in Romania in recent years and represents a crucial moment for Hidroelectrica, opening up new opportunities for development and growth.”
A long time in the making
To those not keeping a close eye on the Romanian stock exchange, this mega deal may have seemed to come out of nowhere.