Romanian state-controlled hydropower producer Hidroelectrica is considering buying assets CEZ and Enel want to sell in the country: distribution and supply networks, but also wind farms operated by the foreign groups, general manager Bogdan Badea said on August 9, reported Economica.net. 

Both Enel and CEZ recently voiced plans to exit the market, while last year Hidroelectrica drafted a strategy to diversify its production base and its business in general — a strategy that is currently being revised to take into account the effects of the new market regulations set under emergency decree (OUG) 114/2018.

Hidroelectrica has begun preliminary procedures to assess these potential acquisitions, stated Badea, confirming information already circulated by local media.

Hidroelectrica has started procedures to select legal advisers for the planned takeovers, but hasn’t started discussions with the two energy companies yet, Badea said. 

The company is also seeking a consultant to help it with its planned IPO, a move consistent with the takeover plans. It plans to increase its capital by issuing new shares which it will sell to investors on the stock market. This would greatly boost company’s resources, already robust given the €530mn bank deposits at the end of last year. Hidroelectrica has boasted robust profitability in recent years.

“Hidroelectrica is interested in appointing a consultant that operates only in the field of consulting services for capital markets. In this respect, the consultant should be free of any conflicts of interest and should not be engaged in the trading of shares, selling, distributing financial analysis and subscribing to the offer of shares,” as outlined in a document published in the Public Procurement Service (SEAP) and consulted by Ziarul Financiar daily.

Hidroelectrica is the largest electricity producer in Romania with a total installed power of 6,444 MW at 208 plants. The Romanian state controls 80% of the company’s shares, with the remaining 20% held by investment fund Fondul Proprietatea.

Czech energy group CEZ, controlled by the Czech state, is considering selling its businesses in Romania, according to unofficial local sources quoted by several media outlets in May. CEZ shareholders were reportedly dissatisfied with the group’s strategy in Eastern Europe and, during a general meeting, told the management that it couldn’t achieve long-term profitability in some markets such as Romania, Albania, Bulgaria and Turkey, Ziarul Financiar daily reported. Moreover, it seems that the Czech state would like CEZ to use its financial resources to build new nuclear reactors in the Czech Republic. In Romania, the group has electricity distribution and supply subsidiaries as well as a large (600MW) wind farm.

Italian energy group Enel plans to sell only minority stakes in its Romanian electricity distribution and supply subsidiaries, unofficial sources quoted by Economica.net said in July, after Money.it reported that the Italian group was in talks with three investment funds to sell its businesses in Romania.

According to Money.it, investors interested in a potential sale of stakes in Enel’s assets include Macquarie, Singapore’s GIC and the Kuwait Wren House infrastructure fund.