David Eathough, a partner with law firm Badea Clifford Chance, which specialises in the capital market, believes the number of initial public offerings performed by Romanian companies is set to rise in the coming months, both on the domestic market and abroad.
"Judging by our activity, I wouldn't be surprised if there were at least six initial public offerings within the next 9-10 months," Eathough told ZIARUL FINANCIAR.
He also said there was a growing interest from large investment banks for the Romanian capital market, which has prompted Clifford Chance to strengthen its presence in Romania.
"We believe that being the first on this market is an advantage and we intend to consolidate our position. Romania is not a mature market, it has just entered the European Union and has therefore attracted the attention of large investment banks. Our global clients want us to be here and we intend to use Bucharest as a regional hub, from where we can also expand onto neighbouring markets, such as Turkey, Greece, Bulgaria and Croatia," explained the Clifford Chance partner.
According to Eathough, a significant level of interest from the company's clients concerning the Romanian market has prompted the firm to increase its team of lawyers in Bucharest.
"We don't want to attract more lawyers, but we do need more lawyers in Bucharest and have become involved in an aggressive recruitment campaign. We estimate an increase in our activity on the capital market segment, for which we intend to hire another 2-3 specialised lawyers," added Eathough.
"The main problem concerning the Romanian capital market is its low liquidity, and in order to have liquidity, large companies need to be listed," explained the Clifford Chance partner.
From a legal and an operational point of view, the shortcomings of the Romanian capital market, as Eathough sees them, include the lack of regulations regarding the trading of GDRs (Global Depositary Receipts), the lack of flexibility in selling shares, particularly regarding shares received as part of initial public offerings and as part of capital increases, the fact that it is impossible to make a discretionary allocation of shares in the IPOs, and the absence of a clearing system connected to the European system.
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