Romania's Electrica's sets low-end share price in privatisation

Reuters - UK Focus

* Prices shares at 11 lei vs 11-13.5 lei range

* Raise 1.95 bln lei ($605.8 mln) for investments

* Romanian retail investors get about 21 pct of shares

* EBRD buys 8.6 percent stake (Recasts with share price, adds EBRD, sale manager comments)

By Luiza Ilie

BUCHAREST, June 27 (Reuters) - Romanian utility Electricahas set a bottom-of-the range price for shares in its stockmarket flotation, being privatised under a 4 billion euros ($5.5billion) aid deal led by the International Monetary Fund.

Electrica, which supplies power to 3.5 million customers inthe European Union state and has a regulated, guaranteed profitmargin, set the final price of its shares at 11 lei apiece,having previously set a range of between 11 and 13.5 lei.

Electrica's flotation, involving the sale of 51 percent ofthe company's equity to raise 1.95 billion lei ($605.8million)to help fund its investment plans, was one of at leastthree selloffs the government had committed to carry out thisyear.

Flotations of minority stakes in coal and hydro powerproducers Oltenia and Hidroelectrica have been delayed mostlikely until next year.

"Pricing ... is the result of our desire to create thepremises for good aftermarket trading, not just to sweepeverything off the table," Mirela Ionescu, investment bankingdirector at Raiffeisen Bank Romania and the sale manager toldReuters.

"Obviously, investors want as much upside as possible. It isa trade-off between investors' desire to raise their yield andthe company's desire to not sell at a discount," Ionescu said.

The bank also set a price of $13.66 for Electrica's globaldepository receipts (GDR), which will trade in London.

Romanian retail investors were given about 21 percent of theshares on offer, with the rest going to large institutionalinvestors. The European Bank for Reconstruction and Development(EBRD), which had already invested about 6.7 billion eurosacross 360 projects in Romania, bought an 8.6 percent stake formore than 320 million lei.

"Our participation demonstrates the EBRD's commitment tosupporting the government's plans for increased privatisation ofthe energy sector," Nandita Parshad, the EBRD's Power and Energydirector said in a statement.

Parshad said the bank would work with Electrica to align itscorporate governance with international standards. "This willprovide additional comfort and confidence to potential futureinvestors."

The share sale ran from June 16 to June 25 on the BucharestStock Exchange and in London. Citigroup (NYSE: C - news) , Raiffeisen andSociete Generale (Paris: FR0000130809 - news) managed the listing.($1 = 3.2287 Romanian lei)($1 = 0.7331 Euros) (Additional reporting by Radu Marinas; Editing by David Holmes)

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