Hidroelectrica to increase its share capital and float 10% of its shares on BSE

Hidroelectrica’s capital will be increased by 12.49% by issuing new shares, the Property Fund (BSE: FP) being entitled to subscribe 2.49% of the titles, based on the preference right, and 10% of the shares will be available on the Bucharest Stock Exchange. “The proposal on the privatization strategy, respectively share capital increase through the contribution of private capital, was based on the following items: attracting independent financial resources from subscribers (institutional and retail investors), necessary to carry out development, modernization and upgrade projects of the company, with impact on state’s incomes, as a shareholder, and the requests of the significant minority shareholder, the Property Fund, to list the company”, the substantiation note of a draft Government Decision prepared by the Ministry of Economy reads. The letter of intent submitted by the Romanian Government to the International Monetary Fund provides that Hidroelectrica will conduct an IPO for a 15% stake. The Government chose in April last year the consortium BRD – Citigroup – Societe Generale – Intercapital Invest to intermediate Hidroelectrica’s floatation. Hidroelectrica, currently in insolvency, has a share capital of RON 4.44bn, owned 80.06% by the state, through the Ministry of Economy. The Property Fund has 19.94% of the titles. The Government has committed to the IMF to list Hidroelectrica on the stock exchange after it exits insolvency, operation estimated by PM Victor Ponta “likely for mid-year”. The company is in insolvency since June 2012.