Romania’s largest natural gas producer, Romgaz, began trading on the Bucharest Stock Exchange and London Stock Exchange Tuesday morning after an initial public offering attracted a host of international investors, including the EBRD.
The Bank acquired a 1.9 per cent stake in the company after Romania’s Ministry of Economy reduced its holding to 70 from 85 per cent.
By taking a stake, the EBRD is aiming to assist Romgaz in its efforts to improve corporate governance, internal control systems and environmental management practices. The stake will also support increased private sector participation in Romania’s energy sector and the development of the local capital market.
“The IPO of Romgaz is a landmark transaction on many accounts: the largest ever listing to take place on the Bucharest Stock Exchange, the first dual listing and a test case for other announced IPOs of comparable size, such as Electrica and Hidroelectrica,” said James Hyslop, EBRD Director for Romania.
Romgaz, headquartered in the central Romanian city of Medias, is active in the exploration, development and production of natural gas, underground gas storage, gas trade and power generation.
As the largest IPO on the Romanian capital market to date, the Romgaz flotation is a test case for future listings envisaged by the Romanian government for 2014 as part of its plans for partial privatisations of state-owned enterprises.
“The Bank is seen by the Romanian government as a good anchor investor in IPOs relative to state-owned enterprises,” said Eric Rasmussen, EBRD Director for Natural Resources. “Romgaz is a new client of the EBRD and we hope to expand the relationship.”