Premier Energy successfully completes its IPO: The largest IPO by an entrepreneurial company on the BVB, in the past 5 years

Bucharest Stock Exchange Posted

FEAS Secretariat spoke with the President of the Bucharest Stock Exchange, and FEAS Chairman Mr. Radu Hanga; and CFO and Member of the Board of Directors of Premier Energy Group Mr. Petr Stohr about the company, IPO and Listing processes. 

– Mr. Radu Hanga, President of Bucharest Stock Exchange

1. How would you describe the IPO process of Premier Energy, and how does the stock exchange plan to support and promote Premier Energy to investors?

With a value of EUR 140mn, for almost 30% of the company’s shares, Premier Energy (BVB ticker: PE) IPO ranked as the second largest IPO carried out by a private company on the Bucharest Stock Exchange ever. The success of the IPO was mainly due to the company’s business profile, as Premier Energy is an electricity producer, balancer, distributor and supplier and natural gas supplier and distributor, active both in Romania and Moldova.

The listing of Premier Energy strengthens the presence of energy and utilities companies on the stock exchange, which are of strategic importance to Romania, and, at the same time, is standing proof for the fact that the stock exchange is one of the main financing channels for companies with ambitious plans. We are pleased to see once more that the retail investors have sustained a high interest, which reasserts the potential of our capital market and the fact that the Romanians come to embrace more and more the idea of investing in stocks.

The offering was carried out between 8 and 15 May and it was the first mixed IPO on BVB, meaning that out of the 35.9 million shares sold, 25 million were newly issued shares, 6.25 million shares were sold by the sole shareholder, Emma Alpha Holding, while 4.7 million shares were overallocated. The retail investors bought 20% of the shares and the institutional investors the rest of 80%. Two important institutional investors revealed after the closing of the IPO, European Bank for Reconstruction and Development bought 3.2%, while NN Group funds got 5.92%.  

During the IPO, we saw an amazing interest coming from the retail investors’ side, as they placed orders with a total value of over EUR 221mn. Thus, only the retail investors oversubscribed the entire IPO by 40%, placing subscription orders for more than 51 million shares. This proved once again the power of retail investors and that they can move important amounts of money when they seize a good investment opportunity.

We worked close to Premier Energy and brokers and there was very good mass media coverage since the first details of the IPO were unveiled. The media played an important role in promoting the IPO, not only those journalists that are specialized on capital markets, but also the general media, written, radio and TV.

We will continue the promotion, not only for Premier Energy, but for the entire capital market, locally and abroad, by organizing investors conferences and one-on-on meetings. 

At the same time, we continue to promote the IR best practices towards the listed companies, in order to be more appealing to investors, international and local. In this endeavor, BVB has alongside partners such ARIR (The Romanian Investors Relations Association) and Envisia Boards of Elite.

2. Overall, can you discuss the listing process? 

Premier Energy came to the market with a market capitalization of about EUR 490mn and a free float of over 20%. 

Due to the large value of the IPO, Premier Energy fulfilled the criteria related to the listing. The minimum criteria for listing on BVB’s Main Market are 3 years of existence, a market cap of EUR 1mn, a free-float of 25%, but this threshold can be lower depending on the value of the IPO. 

In the first 30 days since the listing, the intermediary, Wood&Company Financial Services, acts as Stabilization Agent, which means that it is allowed to buy or sell up to 4,687,546 shares, as stabilizing transactions with a view to supporting the market price of the shares at a higher level than that which might otherwise prevail in the open market.

Another important aspect of this transaction is that the IPO and the listing process were fast, in less than 3 weeks, which shows that all those involved in this transaction worked hard and smoothly. 

– Mr. Petr Stohr, CFO and Member of the Board of Directors of Premier Energy Group 

1. Can you give an overview of your business and its products or services?

Our Group is recognized as one of the fastest-growing vertically-integrated energy infrastructure companies in Southeastern Europe. 

We have built a significant presence in renewable energy generation, with over 1,000 MW of renewable electricity generation capacity either owned, managed, or under development in Romania and Moldova. Our goal is to increase this capacity to between 1400  – 1600 MW in the near future.  We are also one of the fastest-growing renewable electricity suppliers in the region. 

In Romania, we have made substantial strides in natural gas distribution and supply and rank as the third-largest natural gas distributor and supplier in terms of volume and network size, serving over 150,000 consumption points.

Moldova also represents a key market for us. We are the largest electricity distributor in the country, with nearly one million consumption points. Additionally, we are the largest electricity supplier, catering to more than 840,000 clients, which constitutes about 70% of the Moldovan population. A significant milestone for us was the recent acquisition of CEZ Vanzare in Romania, completed in April 2024. This acquisition has expanded our service footprint, enabling us to serve a combined total of approximately 2.4 million electricity and natural gas supply clients across Romania and Moldova. The majority of these clients are households and small businesses.

Our financial growth over the past decade has been remarkable.  We have evolved from revenues of €12 million and zero EBITDA in 2012 to approximately €1.3 billion in revenue and a normalized EBITDA of around €100 million by the end of 2023 without any shareholder equity contributions. This growth underscores our position as one of the fastest-growing energy infrastructure companies in Southeast Europe.

2. What led your company to decide to go public at this particular time? 

We believe that this is the right time for our company to go public. Over the past decade, we have demonstrated consistent growth and our business verticals have yielded strong financial results, showcasing a positive trend in the energy sector. Our solid track record and the robust performance of our various business segments provide a compelling case for listing on the stock exchange.

We also see an opportunity to grow even faster in our renewables generation business where we have substantial opportunities to acquire generation assets and develop plants at attractive price points.  While we have considered alternative funding options for this growth such as private investments or additional loans, we see the IPO as an opportunity to bring additional local investors into the shareholder structure and bring additional value to our investors. Going public allows us to demonstrate that it is possible to thrive even in a highly regulated industry. We are confident that this move will not only enhance our visibility but also bolster investor confidence in our long-term growth prospects.

Overall, our decision to pursue an IPO at this juncture reflects our readiness to take the next step in our corporate evolution and our commitment to delivering value to our stakeholders.

3. How does your company plan to use the funds raised through the IPO?

The capital raised through the IPO will primarily be used to fuel the future expansion of our Group’s renewable energy operations. Specifically, we aim to increase our installed and managed renewable energy capacity to between 1,400 and 1,600 MW by the end of 2026. This ambitious target reflects our commitment to sustainable growth and our strategic focus on renewable energy.

Additionally, we are aligning our expansion plans with European regulations for green gas emissions and sustainability targets for 2050. By investing in renewable energy, we are not only contributing to the reduction of carbon emissions but also supporting the broader European agenda for a sustainable future.

In summary, the funds from the IPO will be instrumental in advancing our renewable energy projects, enabling us to continue our trajectory towards becoming a leading player in the green energy sector while adhering to stringent European sustainability standards.

4. Can you discuss the process of preparing for the IPO, including any challenges faced?

Preparing for the IPO was indeed a challenging journey, one that provided significant learning opportunities for our entire team, myself included. The process required meticulous planning and execution, and we faced several challenges along the way.

One of the key challenges was ensuring that we met all regulatory requirements and prepared our financial and operational data to the highest standards. This was essential to build investor confidence and ensure a successful listing. 

We were fortunate to have the support of experienced partners throughout this process. Citigroup Global Markets Europe AG, UniCredit Bank GmbH, WOOD & Company, Alpha Bank România S.A., BT Capital Partners S.A., and STJ Advisors all played crucial roles. Their expertise helped us navigate the complexities of the IPO process and address the challenges we encountered.

Overall, the preparation for the IPO was a rigorous and enlightening experience, and it has positioned us well for the next phase of our growth as a public company.

5. Overall, how was the IPO process and what is your suggestion to the companies that are thinking about going for an IPO in the future? 

Overall, the IPO process was an exciting and immensely successful experience for us. We achieved a significant milestone by becoming the largest IPO from the private sector in the last five years in Romania, and we are now among the top five companies on the Bucharest Stock Exchange in terms of trading volume.

For companies considering going public in the future, I have several pieces of advice. First, be prepared for the unexpected and ensure your team is adaptable and ready to embrace change. The IPO process can be unpredictable, and having a strong, cohesive team is crucial.

Second, choose your partners wisely. The success of our IPO was largely due to the expertise and support of our partners. Having experienced and reliable partners can make a significant difference in navigating the complexities of the process.

Finally, remain open and adaptable. The IPO journey will challenge you to think differently and adapt to new circumstances. Embrace these changes as opportunities for growth and improvement.

In summary, while the IPO process is demanding, it is also highly rewarding. With the right preparation, team, and partners, companies can successfully navigate this journey and achieve substantial growth, recognition and hopefully over time also strong shareholder returns.

More about the IPO: Click Here