Tuesday, December 11, 2007

Romania: Record €1.1 bln over-subscriptions for Transgaz offering

10 Dec 2007

Investors placed over €1.1 billion (3.9 billion lei) in subscription orders, as part of the initial public offering of Transgaz Medias (TGN), which marks the largest subscription in the history of the Bucharest Stock Exchange reports daily ZF.

The sum placed by the investors as part of the Transgaz offering indicates the rising interest of local and foreign investors in the Romanian capital market, and, in particular, for new issuers, as well as the large amount of liquidity made available for such operations. The over €1.1 billion of subscriptions are twice as high as the sum collected by the Romanian state for the sale of Petrom, and almost a quarter of the total value of shares traded on the Stock Exchange this year. The over-subscription degree (over 17 times) is also a record for the Romanian Stock Exchange, as is the number of investors, which is approaching 11,000, according to the brokers involved in the offering.

The final over-subscription degree could be even higher, given that a large number of investors placed their subscription orders on the last day of the offering, therefore the brokers will finish introducing orders into the system as late as today, and announce the final results of the offering tonight. „The offering will definitely be several times oversubscribed, potentially approaching 30-times on the large-investor segment,” Laurentiu Ciocarlan, manager of Debt & Equity Origination at Raiffeisen Capital & Investment, the broker of the deal, told ZF. The large-investor segment, which accounts for over 60% of the total value of the offering, was oversubscribed more than 24 times, according to data available at the end of the Friday session, with the bulk of the subscriptions on this segment being registered on the last day of the offering (Friday).

Large investors, with subscriptions worth over 500,000 lei (€143,000), placed subscriptions for shares worth over €940 million, compared with the shares offered, worth €38.7 million. 241 subscription orders had been recorded on the large-investor segment on Friday, by the time the Stock Exchange system had closed, whilst the average value of an order stood at €3.9 million. There were however large orders, worth €38 million, for the whole tranche, with an order coming from Financial Investment Company SIF Oltenia (SIF5). The high degree of over-subscription on this segment can also be explained by the fact that institutional investors could subscribe based on a guarantee letter from the depositing party, without having to transfer the money into the account, as is the case for individual investors. There were funds, which oversubscribed the whole large investor segment, in order to make sure they would get as large a number of shares as possible, following the share allotment. On the small-investor tranche (subscriptions of 2,000 to 500,000 lei) shares were oversubscribed by 6.7-times on Friday, with almost 8,000 subscription orders worth €175 million being placed.

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