THE IPO FOR 10% OF THE SHARES BEGINS TODAY Daniela Lulache: "Nuclearelectrica - the main beneficiary of the liberalization of the energy market"

Nuclearelectrica is the main beneficiary of the liberalization of the energy market, Daniela Lulache, the chairman of the company, said on Friday. In her opinion, the main risk for the nuclear energy producer comes from the evolution of the consumption of energy in Romania.

"Nuclearelectrica does not pose any special risks compared to other issuers. The most important risk is represented by the evolution of the consumption of energy, but we will be a direct beneficiary of the liberalization schedule for the price of energy in Romania", the official of the company said, at the pre-launch conference for the IPO of Nuclearelectrica.

The IPO for the sale of 10% of Nuclearelectrica, by which the company will be listed on the BSE, has begun today.

Energy consumption in Romania is set to drop 4% a year by 2017, according to the management plan of Transelectrica.

Daniela Lulache said that last year, Nuclearelectrica has sold 70% of its output on the regulated market, whereas this year, that quota is expected to drop to 50%. Under these circumstances, the company's profit came mostly from the sales on the competitive market, he explained. "Up until now we have been selling a large share of our output on the regulated market. Last year we sold 70% of our output on the regulated market, and this year, 50%."

"The regulated market is not good for us, because it has small, regulated tariffs, and so far our profit came from the small share of the regulated market. Given the small and stable costs, as well as the stable output, the liberalization of the market can only lead to an increase in profitability", according to the CEO of Nuclearelectrica.

Ludwik Sobolweski, the CEO of the BSE (BVB), has expressed his confidence in the fact that the public offer will be successful. He used as his arguments the interest of institutional investors in assets which are profitable and resilient during rough economic periods, as well as the period during which the offer will take place, namely the beginning of September, which he considers better than the one that had been previously announced (the beginning of summer).

• Gabriel Dumitraşcu: "Nuclearelectrica will not have any financial contribution to reactors 3 and 4 any more"

Nuclearelectrica will no longer have any financial contribution to the reactors 3 and 4 of Cernavodă, as it will only participate with its existing assets, said Gabriel Dumitraşcu, the director of the Privatization and Management director of the Department for Energy, at the same event. "The department for Energy has told Nuclearelectrica that it will no longer have any financial contribution to the project of reactors 3 and 4 of Cernavodă. It will enter the project only with the investments it has made so far", he said. Nuclearelectrica will renegotiate with Enel and ArcelorMittal the agreement of the investors for this project, after the European directives in the sector have been changed, Gabriel Dumitraşcu said, who added that the investors in the project will no longer have the ability to benefit directly from the energy produced by the future reactors as the project company Energonuclear will be required to sell it on the OPCOM energy exchange.

Discussing the construction of reactors 3 and 4, Daniela Lulache said that, there are currently ongoing talks with Chinese investors concerning their involvement in the project. She also said that other companies were interested in the project as well, without giving their names, due to the fact that confidentiality agreements were concluded with them.

• Nuclearelectrica estimates an operating profit of 449 million lei in 2017

The management of Nuclearelectrica estimates that in 2017, the company will see an operating profit of 449 million lei (compared to 227 million lei in 2013), amid a turnover of 2.29 billion lei (up from 1.89 billion lei this year).

The IPO will take place between September 9th - September 20th. Nuclearelectrica could raise between 272.8 million lei and 369.3 million lei from the sale of the company's shares on the Bucharest Stock Exchange (BSE). The company intends to sell 25.3 million new shares, representing the equivalent of 10% of the share capital, at prices ranging between 11.2 lei/share and 15 lei/share. The IPO is structured in three tiers, of which the largest, of 85% of the shares on sale, is intended for institutional investors.

A tranche of 10% of the shares put up for sale will be aimed at small subscribers, and 5% represents the tranche of large subscribers.

The price for the small and big subscribers is fixed, and has been set at 15 lei/share, and in the case of institutional investors it will range between 11.2 lei/share and 15 lei/share. Investors that subscribe on the small tier will receive a discount of 8% if they place the order in the first three days of the IPO, and starting on the fourth day the discount will only be 3%.

Retail investors that subscribe on the major tier will pay the same price as the one set for institutional investors. The prices at which the shares will be sold will be determined on September 23rd, on the first working day after the end of the IPO, based on all the valid subscriptions recorded on the tier of institutional investors.