BUCHAREST (Reuters) – Romania could fail to comply with rules attached to billions of euros in EU funding if at least 15% of state-owned utility Hidroelectrica is not listed this month, the European Commission said.
The government is not selling its own shares in Hidroelectrica but instead has approved a plan by sole minority shareholder Fondul Proprietatea, an investment fund managed by U.S. asset manager Franklin Templeton, to take the company public.
The government opposed plans for a dual listing in London and Bucharest, however, and Fondul has warned that it might not be able to sell its entire stake in a domestic listing.
Asked what would happen if a smaller stake gets listed, the European Commission told Reuters: “This milestone requires that the listing of at least 15% of the shares of Hidroelectrica be completed.”
“We wouldn’t speculate at this stage on milestones and targets not being met. As a matter of general principle, member states should implement their recovery and resilience plan as endorsed … in order to receive the funds.”
While European states such as Poland and Hungary are still struggling to unlock funds, Romania had already drawn down more than 6 billion euros before its reform drive stalled and the disbursements stopped.
Hidroelectrica this month announced plans to list on the Bucharest Stock Exchange by July, after the local securities watchdog approves its share sale prospectus.
A source close to the sale told Reuters that the company aims to raise more than 1 billion euros in what could become one of Europe’s largest initial public offerings (IPO) so far this year.
Fondul values its 20% stake in Hidroelectrica at 2.2 billion euros.
($1 = 0.9225 euros)
(Reporting by Luiza Ilie; editing by Jason Neely)
