Croatian Power Utility HEP Says Hires Advisers on IPO Plans

Croatian state-owned energy utility HEP said on Wednesday it has hired Morgan Stanley, Sberbank and the local unit of Italian lender UniCreditas advisers on plans for an initial public offering (IPO).

Last week, Croatia's economy ministry told SeeNews that the government will consider an option for an IPO of up to 25% of HEP, subject to market conditions.

In line with the government's plans, HEP has carried out a selection process for a financial adviser, the company said in an emailed response to a SeeNews inquiry.

The task of the advisers is to determine if there is a possibility to raise capital through a public offering, HEP said, adding that until now it has not received an official decision from the government for the move.

The proceeds from the IPO would be used to strengthen HEP's position on the local as well as on foreign markets, especially in the region.

Also last week, local media quoted economy minister Ivan Vrdoljak as saying that HEP should be eyeing acquisitions in Slovenia, Bosnia, Montenegro, Hungary and Italy and that this expansion opportunity will exist only for one or two more years.

HEP's consolidated net profit surged to a preliminary 1.99 billion kuna ($279.5 million/260.3 million euro) in the first nine months of 2014 from 855.2 million kuna a year earlier, data of Croatia's state asset management office, DUUDI, showed.

The utility's total revenues fell 9.9% to a preliminary 10 billion kuna through September. The company is planned to post a net profit of 740.8 million kuna in 2014, the preliminary data showed.

HEP group owns and operates over 4,000 MW of installed generation capacity and 974 MW of heat production capacity, including 25 hydroelectric plants and eight thermal power plants fired by oil, natural gas or coal.

SEENews