Last summer, Italy’s Enel announced plans to sell operations in Romania, where it provides electricity supply and distribution services in Banat, Dobrogea and Muntenia Sud regions, as well as those in Slovakia. Although the assets put up for sale attracted interest from E.ON, GDF Suez and from state-run Electrica and Nuclearelectrica, Enel changed its mind about the Romanian exit this spring, going ahead only with the sale in Slovakia.
To Electrica, that was a major opportunity, as it has repeatedly said it seeks growth on its core business, electricity distribution – a relatively stable segment because it is regulated, and is not interested in its own generation operations. Besides the deal with Enel, Electrica also failed in its negotiations with Fondul Proprietatea over repurchasing the fund’s minority stakes in it, because they were unable to agree on a price.
“We are looking at every opportunity because we see those around us, the vertically integrated companies, going through a transformation, so we, the little guys, are sitting on the sidelines and watching. The difference is we’ve got the money, too. Opportunities like Enel might come up again,” Ioan Rosca says.
Electrica conducted an initial public offering on both the Bucharest and London Stock Exchanges last year, raising almost 2 billion lei (EUR450 million) for a 51% stake.
One of the opportunities Electrica is considering is a takeover in the Republic of Moldova, but Rosca says the uncertain regional political context is affecting its appetite for such a deal.
Electrica’s investment plans are topical subject since the Energy Ministry surprisingly rejected its 2015 investment plan in April. The plan submitted to the shareholders at the time had Electrica invest RON671 million this year, with RON595 million of which going towards the electricity distribution network. The Ministry, however, instructed its representative to the general meeting of shareholders on April 27 to request a voting on the capital expenditures be postponed until the company provided more details about proposed investments or if, not possible, to vote against the plan.
Electrica will therefore submit its 2015 investment plan again, as well as a new Board of Directors and management compensation scheme to shareholder voting. The shareholders will convene on July 9 to discuss capital expenditures and the remuneration of the board of directors and the executives.
Besides infrastructure investments and potential acquisitions, Rosca added Electrica was interested in diversifying its service portfolio.
“Our priority is distribution and supply of electricity, but we are not ruling out the possibility of trading other commodities. I believe the segments that will develop in the future and we want to operate on are energy management, energy efficiency improvement and energy storage programs,” the Electrica official said.
Electrica posted consolidated net profit of RON401.4 million last year, 59% higher than in 2013. Total revenue dropped 5% to RON5.2 billion compared with 2013.
(English version by Loredana Fratila-Cristescu)