Romanian energy producer Hidroelectrica’s IPO has been priced at 104 lei ($22.87) per share, it said on Wednesday, implying a market capitalisation of $10.3 billion in what a government minister described as a “historic success,” according to Reuters.
The pricing of the initial public offering, Europe’s largest so far this year, was around the middle of an indicated range of 94-112 lei.
“We are happy to see the strong investor interest which has driven a successful outcome,” said Chief Executive Bogdan Badea. The stock will start trading on July 12 on the Bucharest bourse.
The sale included existing shares held by Fondul Proprietatea, a fund managed by U.S. asset manager Franklin Templeton. Including an over-allotment option, it amounts to Fondul’s entire 19.94% stake.
The government will retain its 80% holding in the country’s largest energy producer, which has power capacity of 6.3 gigawatts from 182 hydroelectric plants.
While plans to list the company have been discussed for over a decade, an IPO was ultimately required by the EU as part of a deal to unlock post-pandemic recovery funds.
“We are talking about an event awaited for more than 10 years, as well as the biggest listing in the history of the Bucharest Stock Exchange,” Romanian Energy Minister Sebastian Burduja said in a statement.
“This historic success of listing Hidroelectrica shows that it was the right choice,” he said.
Hidroelectrica’s announcement comes as two other European firms move to complete IPOs this week: ThyssenKrupp’s hydrogen unit Nucera and British money transfer group CAB Payments.
Bankers hope this sudden wave of listings after a prolonged drought will encourage other European corporates to go public later this year and into 2024. The performance of the shares once they start trading will be watched closely.
Hidroelectrica’s placement was multiple times oversubscribed, with 80% of shares going to institutional investors. More than a quarter of the shares were allocated to domestic institutions ahead of launch.
Last year Hidroelectrica’s adjusted EBITDA margin hit 64% of revenue, twice the 30% margin reported by Austria’s Verbund, its closest competitor. Verbund’s shares have lost more than a fifth of their value on the Vienna Stock Exchange in the past 12 months.