“We wanted to follow the example of our group,” said Stab. Bonds account for 50% of the group’s debts and Gaz de France was the first ever company to issue bonds in euros with a maturity of one hundred years, said the official of GDF Suez Energy Romania.
French-Belgian giant GDF Suez, with revenue of over EUR90 billion worldwide, entered the Romanian market in 2005 when it bought 51% in Distrigaz Sud from the government. The company is now called GDF Suez Energy Romania.
GDF Suez Energy Romania closed on Tuesday a bond offering in lei which was oversubscribed as investors subscribed RON282.5 million, 13% higher than the initial value of the offering. So investors will get 88% of the bonds subscribed, with the allocation being made in proportion to the amounts subscribed.
The bonds carry an interest rate of 7.4% a year and a maturity of five years, with the coupon being paid on an annual basis. The offering was underwritten by BRD SocGen.
Before deciding on the method of financing, the company also considered taking out a bank loan to finance investments.
“We believe the bond issue is a more interesting solution than a bilateral loan or a credit provided by an export credit agency. We analyzed these two options very carefully, but decided bonds were the best solution,” Stab said.
The official added that bond issuing will be taken into consideration in the future as well if the company needs financing, “especially that now we know how it’s done.”
For 2012 and the next few years the company has several investment projects underway, among which is the wind farm in Gemenele, Braila county (southeastern Romania), and plans investments of EUR163.4 million in updating the gas distribution networks.
The amount attracted through the bond issue will be used to finance investments in modernizing and expanding networks, as well as to develop the wind farm, Stab said.
The total investment in the wind farm is valued at around EUR80 million. The company plans to be more active in the production of renewable energy and analyzes the possibility of buying wind power facilities in Romania, in various stages of development, according to Mediafax.
GDF’s bond issue was the first one to be carried out on the Romanian market by a company outside the financial and banking industry. As investor demand exceeded the offer other private companies could be encouraged to issue bonds if they cannot or don’t want to access a bank loan.
In 2011, GDF Suez Energy Romania posted a turnover of RON4 billion and a net profit of almost RON210 million.
(English version by Daniela Stoican)