OMV Petrom to delist GDRs from London Stock Exchange as Romania's capital market flourishes

Oil and gas company OMV Petrom announced on August 24 it plans to delist its global depositary receipts (GDRs) from the Main Market of the London Stock Exchange (LSE). 

OMV Petrom said that the shares traded on the Bucharest Stock Exchange (BVB) are now more attractive than the GDRs traded on the LSE in terms of liquidity. 

The company said the original decision to list the GDRs in London was made to give the company access to a larger investor base and also due to the low level of liquidity and accessibility limitations on the Bucharest Stock Exchange. 

The GDRs were admitted to trading on the LSE Main Market on October 20, 2016. 

Since then, however, “there has been a steep reduction to the number of GDRs in issue to around 5% of the initial volume at the time of listing, which the company believes reflects a low level of investors’ interest in the GDRs, especially since 2019, which is corroborated with an increase in investors’ interest in the Bucharest Stock Exchange,” OMV Petrom said. 

According to the company, compared to 2018, the traded value of the GDRs decreased by 97% in 2022 to $0.3mn and an average of $1,250 per day. As of July 31, 2023, the GDRs accounted for only 0.03% of the company's share capital with the total capitalisation of the GDRs at just $2.3mn. 

“The Bucharest Stock Exchange's development over the years, the inclusion of the company in the FTSE Russell EM indices and the market-making services contracted by the Company since September 2021 have made the shares traded on the Bucharest Stock Exchange more attractive, from liquidity perspective, than the GDRs traded on the London Stock Exchange,” said OMV. 

“Against this background and considering also the ongoing regulatory compliance and administrative costs the company incurs as a result of its London listing, the company does not see a relevant benefit of maintaining this listing. Consequently, the company is now seeking the cancellation of the listing of its GDRs on the Official List and of their trading on the Main Market.” 

OMV Petrom, Southeast Europe’s largest oil and gas company, has started the process of delisting the GDRs. 

The decision to delist was backed by the holders of 90% of the share capital and 99% of the total votes of shareholders present at the extraordinary general meeting of shareholders on April 26.

October 25 is expected to be the final day of trading in the GDRs on the LSE.

The BVB announced in late August that there has been a hike in the number of investors and in trading values and volumes following the IPO of energy company Hidroelectrica (H2O) in June-July. 

Hidroelectrica carried out the largest ever IPO on the Bucharest exchange, raising RON9.28bn (€1.9bn) through the sale of 89.7mn shares, as a 19.94% stake in the company was put up for sale. Hidroelectrica's IPO was the biggest in Europe so far this year, and the third largest IPO globally. 

In a statement on August 23, the BVB said there has been a sharp increase in the number of investors on the Romanian capital market, which surged to nearly 160,000 by the end of the first half of 2023. This is an increase of 200% compared to the approximately 54,000 investors in 2019.