Hidroelectrica announces pricing and allocation of its Initial Public Offering

Hidroelectrica, Romania’s leading electricity producer with a 100% renewable portfolio and one of the largest hydropower companies in Europe, announces the pricing of the initial public offering by Fondul Proprietatea of 78,007,110 of the Company’s existing ordinary shares. Following the closing of the Offer, Hidroelectrica will apply for admission to listing and trading of its shares on the Premium tier of the regulated market of the Bucharest Stock Exchange.

Highlights:

• The Offer has been priced at RON 104 per Offer Share (“the Offer Price”), implying a market capitalisation of RON 46.8 billion (€9.4 billion).

• Retail investors in Romania were entitled to a 3% discount from the Offer Price for applications submitted on the first five business days of the Offer Period. The final discounted offer price for shares subscribed for under these conditions is RON 100.88 per Offer Share.

• The Offer, including the additional shares over-alloted for stabilisation purposes, represents a number of 89,708,177 shares, amounting to 19.94% of Hidroelectrica’s total issued share capital and Fondul’s entire holding in the Company.

• The Offering was oversubscribed multiple times at the Offer Price, with strong investor demand from investors globally, including from Romania. Formal allocation took place today, 5 July 2023. The Company and Selling Shareholder jointly decided to re-allocate shares from the Institutional Tranche to the Retail Tranche following which Institutional investors were allotted 71,766,542 shares, and retail investors were allotted 17,941,635 shares, representing 80% and 20%, respectively, of the total number of sold shares (including the additional shares over alloted for stabilisation purposes). The pro rata allocation factor calculated for the retail investors tranche is at 0.3209762650.

• The Cornerstone Investors (as defined in the Prospectus) purchased in aggregate RON 2.24 billion in shares at the Offer Price, subject to certain customary conditions.

• Settlement will take place on 10 July 2023. The Admission and start of trading on the BSE under the symbol “H2O” is expected to take place on 12 July 2023.

• Immediately following the Admission, the Company’s shares will be included in the BET index of the BSE.

• The Selling Shareholder has granted the Joint Global Coordinators an over-allotment option, representing a number of 11,701,067 shares, namely 15% of the Offer Shares, exercisable in whole or in part within 30 calendar days following the Admission.

• The Company and Fondul are subject to a lock-up arrangement during a period from 22 June 2023 until the date falling 180 days after the date of Admission, and the majority shareholder is subject to a lock-up arrangement during a period from 22 June 2023 until 12 months after the date of Admission, subject to certain exceptions disclosed in the Prospectus.

• Citigroup Global Markets Europe AG, Erste Group Bank AG, Jefferies GmbH and Morgan Stanley Europe SE are acting as Joint Global Coordinators in connection with the Offering. Banca Comerciala Romana S.A., Barclays Bank Ireland PLC, BofA Securities Europe SA, UBS Europe SE, UniCredit Bank AG, Milan Branch and WOOD & Company Financial Services, a.s. are acting as Joint Bookrunners. Auerbach Grayson, BRD – Groupe Société Générale, S.S.I.F. BT Capital Partners S.A. and S.S.I.F. Swiss Capital S.A. are acting as Co[1]Lead Managers (together, the “Underwriters”).

• Rothschild & Co Equity Markets Solutions Limited is acting as Financial Adviser to Fondul Proprietatea S.A., and STJ Advisors is acting as Financial Adviser to the Company in connection with the IPO.

Bogdan Badea, Chief Executive Officer of Hidroelectrica, commented: “We are happy to see the strong investor interest which has driven a successful outcome of Hidroelectrica’s IPO. This is a significant milestone for both Hidroelectrica and Romania, which will support our company’s long-term development. On behalf of the company, I look forward to welcoming new shareholders to Hidroelectrica. As Romania’s leading electricity producer with a 100% renewable energy portfolio, we aim to drive value creation as we help the country deliver on its energy transition.”

Hidroelectrica is the leading electricity producer in Romania in terms of electricity produced and one of the largest hydro players in Europe. It owns and operates 182 hydropower plants, five pumping stations and one wind farm, which are strategically positioned in eight geographical branches across Romania. The total installed capacity of the Company’s hydro assets is divided into storage hydropower plants, run-of-river hydropower plants and pumping stations.

Hidroelectrica has a 100% renewable portfolio with an installed hydropower production capacity of approximately 6.3 GW and an installed onshore wind capacity of 108 MW from the Crucea wind farm. Between 2018 and 2022, the Company had an average market share of approx. 29% in terms of total electricity delivered to the grid (as per the Romanian Energy Regulatory Authority (“ANRE”) annual reports).

Hidroelectrica is one of the largest hydropower producers in Europe, generating 13.6 TWh of electricity from hydro sources in 2022, 16.9 TWh in 2021 and 15 TWh in 2020 (all representing gross production). The 2022 production level reflects less favourable hydrological conditions, due to a severe drought.