Fondul aims to list minority stake in Romania's Hidroelectrica by April 2023

BUCHAREST, Oct 11 (Reuters) - The planned initial public offering of Romanian state-owned hydropower producer Hidroelectrica may be smaller than initially projected and won't happen until March or April next year, shareholder Fondul Proprietatea (FP.BX) said on Tuesday.

Fondul, the company's sole minority shareholder, which gained government approval for the IPO, had previously set Nov. 15 as the target date for launching the listing.

Fondul was set up as a fund to compensate Romanians for assets seized under communism and holds minority stakes in a string of state firms, including 20% of Hidroelectrica.

The fund is run by investment manager Franklin Templeton, which told Reuters on Tuesday that plans to float a 15%-20% stake in Hidroelectrica in a 2.5 billion euro ($2.43 billion) deal may have to be downsized if the Romanian government continues to resist a dual listing in Bucharest and London.

"There are question marks surrounding the ability to sell 15% of Hidroelectrica in a local listing only," Franklin Templeton deputy CEO Marius Dan said.

"In order to complete an IPO on the Bucharest Stock Exchange, the deal may have to be downsized by anywhere from 1.0 to 1.5 billion euros."

The government wants a Bucharest listing to promote liquidity in the domestic market. The IPO will involve the sale of Fondul shares in Hidroelectrica, not government shares.

Dan said the fund will seek to meet the prime minister and ruling coalition leaders in coming weeks to present the recommendation by its selected consortium of banks for a dual listing to attract investors.

"Even if it's only a Bucharest listing, we are committed to continue with the process and finalize it as soon as possible. That being said, we are not a seller of Hidroelectrica at any price," Dan said.

He said Fondul would start to have "early look" meetings for the IPO within the next two to three weeks.

"We will try to complete the listing of Hidroelectrica as soon as possible, but from where we are today, the optimal window of opportunity looks to be March-April 2023," he said.

Downsizing the float would also mean the government would fail to meet a commitment to take 15% of Hidroelectrica public by mid-2023 as part of targets agreed with the European Union for post-pandemic recovery funds. Various state plans to list Hidroelectrica have been around for nearly 15 years.

Fondul also aims to finalize the IPO of salt producer Salrom by May 2023, Dan said.

($1 = 1.0300 euros)

Reporting by Luiza Ilie; Editing by Susan Fenton

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Thomson Reuters

Bucharest-based general news reporter covering a wide range of Romanian topics from elections and economics to climate change and festivals.