The L1.7 billion ($535 million) IPO the largest ever from the southeastern European country, and the first to include a listing in London as well as Bucharest was oversubscribed and priced near the top of its marketed range. Coming hard on the heels of a smaller listing of fellow state-owned energy firm Nuclearelectrica, whose L282 million IPO in September was the first from Romania since 2007, the Romgaz deal has revived hopes for acceleration of the privatization programme and the development of local capital markets. The sale of a portfolio of government assets was a condition of a 20 billion bailout of Romania by the IMF, World Bank and EU in 2009. But the process has been dogged by delays. Dented confidenceThe cancellation of a partial privatization in July 2011 via a $700 million secondary offering of oil firm OMV Petrom dented investor confidence. Afterwards, deals were slow to emerge. Mandates on Romgaz were first awarded in January 2012 to Goldman Sachs and Erste Group.
Sobolewski agrees. Being frontier offers opportunities at the moment, but being an emerging market would greatly increase the flow of capital into Romania, he says. In what Sobolewski says is an optimal scenario, the country would graduate to emerging market status by the end of 2015.