Buy orders placed by investors in the Petrom offering are not introduced into the system of the Bucharest Stock Exchange (BVB), so there is no public information on the level of subscription in the first two days.
Valid orders will be registered in the stock exchange’s system only a day after the closing of the offering, i.e. on July 23, according to the offering prospectus. It is also then that the level of subscription for each investor portion and the sale price will be made public.
Until then, only the operation’s brokers, Renaissance Capital, BT Securities, EFG Eurobank Securities and Romcapital have information on the subscription level. The government committee that oversees the sale of the 9.84% stake in Petrom is also informed on a daily basis on the level of subscription, the brokers add.
“During the time when the offering is conducted, this subject is closed. No subscription data is provided in order not to influence the offering process,” said Rares Nilas, general manager of BT Securities.
The allocation of shares in the offering based on the highest price and on the time of subscription causes any information on the level of subscription to influence the progress of the offering. For instance, if a few days before the closing of the offering, the subscription level were low, investors could place orders at lower prices, which would hurt the state’s chances of maximizing its revenue by selling shares.
In all previous offerings, subscription orders were registered in the stock exchange’s system the day they were introduced. This way, brokers and investors had daily information on the progress of the offering.
“We have an agreement signed with the stock exchange and they agreed to this method of conducting the offering.”
“This manner of registering orders, with a closed book, has a clear aim: not to influence the price formation process. This is done all over the world, including in Warsaw and Vienna. But we are an exception,” Rares Nilas explained.
The Romanian Economy Ministry is selling 5.57 billion shares, accounting for 9.84% of the capital, through a public offering, at a maximum price of 0.46 lei/share.