THE ELECTRICA IPO, ACCORDING TO THE PRIME MINISTER:"It is better to be lucky than smart"

Adina Ardeleanu (Translated by Cosmin Ghidoveanu)
Ziarul BURSA #English Section / 7 iulie 2014

"It is better to be lucky than smart"

The price is up 2.27% on the first day

Among praise and thanks, prime-minister Victor Ponta on Friday let slip a clever phrase that truly shows the extent of the success of the "Electrica" IPO: "It's better to be lucky than smart".

"The biggest IPO" in the history of our stock market, like the authorities, the underwriters and the officials of the stock exchange keep repeating, came out a success out of luck, after the consortium of underwriters itself had to amend the prospectus, and during the subscription period, the Proprietatea Fund sold 5% of Romgaz, which turned away some of the investors who were interested in Electrica.

On Friday, Victor Ponta went to London, on the occasion of the listing of the Global Depository Receipts today (ed. note: Friday) something that I will use in my political career, that it is better to be lucky than smart. We have been lucky and now we need to be smart to keep this luck that our companies had", the prime minister said in London, according to Agerpres.

In Bucharest, state secretary Karoly Borbely, said that the "steps" of listing Romanian companies on the Bucharest Stock Exchanges must continue, and the Romanian state should "slowly" reduce its stakes in the companies it controls.

Through this operation, he wants Romania to be "upgraded" to the level of emerging economy, in order for it to attract more investments.

Small investors who received a discount had a return of 7.65%

The shares of "Electrica" opened their first session on the BSE at 11.11 lei/share. At the end of the day, the quote was 11.25 lei/share, up 2.27% over the price in the IPO. Small investors who received a 5% discount in the first 5 days of the IPO, would have posted a gain of 7.65% on Friday.

On the BSE, the turnover of Electrica was 59.9 million lei (13.31 million Euros).

In London, the GDRs fluctuated slightly, rising to 13.73 dollars/unit, compared to 13.66 dollars, in the IPO.

Dumitraşcu: "Electrica is likely to join the crown jewels of the BSE"

Gabriel Dumitraşcu, the head of the Privatization Division of the Energy Department, said that the IPO of Electrica has involved a fantastic effort, because it is not comparable to anything that has happened so far: "The IPO of Electrica can not be compared to any privatization done so far. it is a first for the Romanian market, because we are not taking a company public, but a holding, a group of companies".

The Electrica group of companies includes three companies for the distribution of energy, an energy transmission company, the parent company and Electrica Serv, the energy services company. "I don't think that the underwriters imagined how hard it was going to be", Dumitraşcu went on to say.

He said that it is natural to thank the underwriters of the IPO, but he said that he has greater expectations from each of the members of the consortium in the future.

Gabriel Dumitraşcu praised Raiffeisen, in particular, which he said has progressed spectacularly compared to the previous times that he has worked with them.

The state official said that Electrica could become one of the crown jewels of the BSE.

Cercel, BRD: "40% of the shares sold were bought by Romanian investors"

The IPO of Electrica showed that Romanian investors are interested, said Claudiu Cercel, the deputy CEO of BRD.

According to him, 40% of the number of shares sold have been acquired by Romanian retail and institutional investors.

Electrica has raised 1.95 billion lei (444 million Euros) through the IPO which it held between June 16th and June 25th, the biggest ever on the Romanian market.

Following the IPO, the Romanian state has been left with 49% of the shares of Electrica. The European Bank for Reconstruction and Development (EBRD) has invested 75 million Euros in the IPO and has thus acquired 8.6% of the shares of the company, thus becoming the second largest shareholder, after the Romanian governmental. The third largest shareholder is financial group ING, which has bought shares through several entities.

Dumitraşcu: Hidroelectrica will be a more spectacular listing than Electrica

"Often times, Remus Borza says wacky things"

Hidroelectrica will be a more spectacular listing than Electrica, says Gabriel Dumitraşcu, the head of the Privatization Division of the Department for Energy.

Lawyer Remus Borza, the head of Euro Insol, which is the appointed receiver of Hidroelectrica, recently said that the electricity producer will exit the second insolvency next summer and that the IPO will be held in Q4 2015.

"My mission is to pressure him to do things right and that is what I do every day", Gabriel Dumitraşcu said. He added: "Remus Borza is my friend, I respect him, but often times he says wacky things >".

Electrica goes forward with God

The Archdiocese of Cluj has "renounced" the Proprietatea Fund and has bought shares in the Electrica IPO

Even though many people have praised the EBRD, thanking it for its 7.5 million Euros invested in the IPO, the luck that prime minister Victor Ponta was talking about seems to have come from another "strategic" investor: the Archdiocese of Cluj.

The economic advisor of the Archdiocese of Vad, Feleac and Cluj, Sorin Câlea, said that he has bought shares, in the IPO, after he sold some of the shares the Archdiocese had in the Proprietatea Fund, received as compensation for the buildings and the plots of land that were abusively seized by the communist regime.

"We have sold shares of the Proprietatea Fund and we have acquired shares in Electrica", said Sorin Câlea, quoted by Mediafax, and he added: "We think that it is a viable company, which would probably bring a higher return than the one that the shares of the Proprietatea Fund are currently bringing. The Archdiocese of Cluj used a brokerage firm to sell its holdings".

He added that the reason why he bought shares in Electrica was, one on hand to split the risk, and on the other hand to support some social projects of the Archdiocese of Cluj.

Although it may seem a novelty, it is not the first time that the clergy gets involved in the stock market.

In 2008, the Romanian Orthodox Archdiocese of Alba-Iulia was a shareholder in Cars Târnăveni (CARS), and over time has had holdings in banks and the SIFs.

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