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August 16, 2022
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Economy Romanian News

Interesting IPOs announced by Romanian Government

The recent political shift of power in Romania brought along investment opportunities for those who want to invest in Romania, both foreigners and local investors. Such an opportunity has just been revealed by the new minister of Finance, Florin Cîțu, on Thursday.

According to his statement, the liberal government intend to partially privatize two of the major state-owned companies in Romania: CEC Bank and Hidroelectrica.

For CEC Bank, the Romanian Government wants a 20% IPO

The first one is the oldest Romanian state-owned bank, with a tradition of over 155 years. During the communist regime, CEC was the bank to go to whenever you wanted to save or borrow money as it had products and services for the individuals. During the communist regime, CEC bank had a market share of over 30% for banking products and services. Now the market share of CEC Bank dropped significantly, down to 6%.

Still, CEC Bank has higher targets, as recently European Commission approved a 200 million Euros capital increase for the state-owned bank, this move and the intention of partially privatizing it and listing the shares on BVB (Bucharest Stock Exchange) make CEC bank a potential very competitive bank in the future.

For Hidroelectrica, the Romanian Government wants to sell 10-15% of its shares

This was in fact negotiated by the new government with one of the political parties which formed the former social-democratic coalition. In fact, in order to support the new government by voting it in the Parliament, an old faction of the liberals, ALDE, asked the prime-minister to agree on partially privatizing Hidroelectrica.

Hidroelectrica is a public listed company, entirely state-owned, which has as main objective power generation and services by using hydro-power.

Both state-owned companies are among the oldest and the most known in the country and abroad, which will make the IPO more attractive for foreign investors and local ones.

Photo source: Visit Bucharest

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