Premier Energy, the 3rd supplier in the natural gas market, also a player in the market of electricity, indirectly owned by the Emma Capital investment fund of the Czech businessman Jiri Smejc, comes to the stock exchange today, an operation first announced by Profit.ro and which represents the most important mtrigger after the listing of Hidroelectrica.
event
May 27 – Event Profit.ro: The Romanian real estate market under the specter of the Western crisis. IV edition
May 30 – European Funds Marathon
June 6 – The Energy Marathon
June 13 – Profit Event: Capital Market.forum – Challenges for developing markets and increasing liquidity, 4th Edition. Partners BCR, CEC Bank, Sphera, Teraplast
The primary offering for sale of up to 25 million shares under the symbol PE, which may be increased to a maximum of 30 million shares, and the secondary offering of up to 6.25 million shares, which may be increased to a maximum of 7.5 million shares shares, will be launched today, valid until May 15, in a price range between 19-21.50 lei, thus resulting in the possibility of an operation of over 907 million lei.
In the prospectus related to the listing, the company also presents, according to the procedure, a series of risks. It is thus shown that people interested in investing should be aware of the legal, economic, fiscal and political risks, including those related to corruption, involved in the group’s activity in “emerging and frontier markets”, such as Romania and the Republic of Moldova.
“Investors in emerging and frontier markets, such as the countries in which the group operates, should be aware that these markets are subject to greater legal, economic, fiscal and political risks than mature markets and are subject to change fast and sometimes unpredictable”, the document states.
Another element that should be taken into account, according to the authors of the listing prospectus, is corruption.
“Corruption is one of the main risks faced by companies that carry out commercial operations in Romania and Moldova. (…) Corruption affects the judicial systems and some of the regulatory and administrative bodies in Romania and Moldova, which may be relevant to the group’s activity and could have a negative effect on the activity, prospects, results of operations and financial condition of the Group”he writes in the cited document.
In addition to geopolitical risks, the volatility of financial markets may also lead to an increase in the perceived risks associated with investments in emerging economies and, therefore, could reduce foreign investments in Romania and Moldova.
“In this case, the economies of Romania and Moldova could face significant liquidity problems, which could lead, among other things, to the increase of tax rates or the imposition of new taxes and fees, with a negative impact on the activity, the results operational and financial situation of the Group.
But the main risk identified is the regulatory one. Specifying that in Romania, only the supply activity is not fully regulated (unlike the distribution activity, which is completely dependent on ANRE), attention is drawn to the fact that “any price caps or similar measures established by ANRE can have a negative effect significantly on the prospects, activity, financial position of the Group and the results of its operations, and The group may have limited opportunities to appeal these changes“.
As the money obtained from the listing is to be invested in increasing the renewable energy production portfolio, the prospectus points out that it is possible that The Group may not be able to successfully implement its business strategy and capital investment plans or that the Group’s potential investments and acquisitions may not achieve the expected results and present risks or uncertainties.
Security of supply is another risk highlighted in the prospectus: “The Group’s natural gas fumigation activity is based on natural gas from major national and international producers, as well as intermediaries (including one of the first private companies in Romania with LNG terminal capacity in Greece, which has cross-border import capacity in Bulgaria, Romania and Hungary) and from the wholesale natural gas market. Although in the past The Group has been able to replace certain natural gas suppliers in the short term when necessary, some intermediate importing natural gas suppliers have breached their natural gas delivery obligations in the past and other suppliers may meet their obligations in the future, possibly requiring the Group to find alternative suppliers in a short time at possibly less attractive prices“.
In addition, Premier Energy’s ability to “pass on the price of electricity or natural gas supply to residential or industrial consumers is difficult to predict and may be beyond the Group’s control, as this is currently regulated by the Government of Romania and the Moldova and may be subject to emergency regulatory measures during periods of high volatility”.
Premier Energy Group claims that cannot fully control the price it charges for the electricity it distributes/supplies and for the natural gas it supplies, which may ultimately impact the retention of certain customers and/or the implementation of certain planned or potential projects of group.
In addition, the competition in the market should not be ignored. “Especially the operations in Romania are exposed to competition from other participants in the open market, which can lead to the loss of end consumers who change their supplier, abandoning the Group in favor of other competitors (a process known as the “customer loss rate” ) where the Group is unable to compete effectively in terms of price and scope of services it provides. (..) Increased competition may force the Group to lower prices or lead to a decrease in the volume of energy consumed“.
Premier purchased at the end of last year, paying 15 million euros, the company CEZ Vânzare with a portfolio of around 1.4 million customers.
Premier Energy is a supplier for domestic and non-domestic consumers (from the retail, industry, trade area), operates and owns a gas distribution network in and around the capital Bucharest, the south and west of the country, as well as in smaller towns in the northern part of Romania (in total 2,500 km of network).
Established in 2007, Premier Energy operates as a distributor and supplier on the natural gas market in Romania, being the third major profile player, after Engie and E.ON. The company is owned by Cyprus-registered energy holding company Premier Energy PLC, indirectly controlled by Czech businessman Jiri Smejc through investment fund Emma Capital.
At the same time, Premier Energy PLC is the largest distributor and supplier of electricity in the Republic of Moldova, with a market share of around 70%.
The Group has over 1,000 MW of renewable electricity generation capacity under ownership, management or development in Romania and Moldova, together with one of the fastest growing renewable electricity supply businesses in both countries.
In Romania, it is the third largest distributor and supplier of natural gas with over 150,000 consumption points. It is also the largest distributor and supplier of electricity in Moldova, with almost one million consumption points and over 840,000 customers, serving approximately 70% of Moldova’s population.
Following the acquisition of CEZ Vânzare in Romania, Premier Energy Group serves a total of approximately 2.4 million electricity and natural gas customers in Romania and Moldova (an increase of approximately 1.4 million), most of whom are household customers and small businesses.
At the end of 2021, Premier Energy fully acquired the company Alive Capital, the largest independent player in the renewable energy market. Through these acquisitions, the group is preparing its transition to renewable energy, the target set for Romania and in the region being 300-500 MW in the next five years.
Jiri Smejc is also the CEO of PPF, the largest investment fund in the region, with assets of over 42 billion euros. The Emma Capital fund has 65,000 employees worldwide and total gross assets of approximately €14.5 billion.
QIn the fall of 2019, the Czech investment group PPF Group, then controlled by Petr Kellner, became the owner to media group Central European Media Enterprises (CME), which also owns PRO TV, in a cross-border transaction valued at $2.1 billion.
In the year ended 31 December 2023, the Group generated consolidated revenues of 912.0 million euros, net profit of 78.8 million euros and adjusted EBITDA of 127.7 million euros.
Tags: Premier Energy coming stock exchange today important move Hidroelectrica List risks Corruption affects judicial systems regulatory administrative bodies DOCUMENT
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