12 Jun 14

Romania Hopes for Windfall From Power Producer Sale

Romania hopes to raise up to 435 million euro by the sale of a majority stake in the power distributor, Electrica.

Marian Chiriac Bucharest

The Romanian government on Wednesday announced the launch of the sale of a 51-per-cent stake in the electricity distributor Electrica, from which it hopes to raise up to 1.95 billion lei (some 435 million euro).

The sale forms a major part of the Romania's privatisation strategy, which has been agreed with the International Monetary Fund, IMF.

The offer will be launched on June 16 and ends on June 25. Besides a listing on the Bucharest Stock Exchange BVB, Electrica’s global deposit certificates will also be listed on the London Stock Exchange.

“I am confident that it will be a successful share sale and that the private capital we are attracting will be used by the company to fund the much-needed energy infrastructure investments,” Prime Minister Victor Ponta said.

Ponta previously said most of the funds raised via the sale of Electrica would be used to improve power links with neighbouring Moldova.

Electrica is the leading distributor and supplier of electricity in Romania. Last year, the group distributed 16.1 terrawatt hours (TWh) of electricity to around 3.6 million users, representing 39 per cent of the volume of electricity distributed in Romania.

Electrica is the second Romanian company listed in London, after the country last year raised 1.7 billion lei via an initial public offering of a 15-per-cent stake in the state-run natural gas producer, Romgaz.

Romania has been selling stakes in state-owned companies to cover its budget deficit and reduce the government’s influence over the economy.

The government sold minority stakes in the nuclear-power generator Nuclearelectrica and Transgaz last year and grid operator Transelectrica in 2012.

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