Sunday, August 2, 2015

Fondul Proprietatea completes fifth buyback program


Franklin Templeton Investment Management Ltd. United Kingdom Bucharest Branch (“the Fund Manager”), in its capacity as sole director and fund manager of Fondul Proprietatea S.A. (“the Fund”) hereby announces the completion of the fifth buy-back programme. The Fund Manager acquired 227,572,250 shares of the Fund (equivalent to 1.86% of the Fund’s subscribed share capital) through daily acquisitions on the Bucharest Stock Exchange. The total value of the buy-back programme was RON 193,470,259.59 (excluding brokerage fees and other acquisition related costs), and the weighted average price was approximately RON 0.8501 per share. The Fund Manager will request the shareholders’ approval for the cancellation of the shares repurchased during this buy-back programme at the future shareholders’ general meetings. The Fund Manager intends to continue with share buy-backs in accordance with the Fund’s Investment Policy Statement, and will start the sixth buy-back programme, approved by the shareholders on 27 April 2015, soon after the cancelation of the shares acquired during the fourth buy-back programme is endorsed by the FSA, which has already been requested.

I wrote up Fondul Proprietatea here. I really like this investment because the fund manager has a mandate to close the discount to net asset value via buybacks. The current discount is 31%. The fund manager, as announced,  will continue to buyback shares in order to close the gap. The great thing is that the NAV has actually risen over time as the fund manager takes various actions to increase the value of the various holdings of the fund. This fund has quite a bit of institutional sponsorship including a big position by Paul Singer. It trades in London so you would need an account with Interactive Brokers or someone similar who can trade this stock. I have been adding to my position as I like to buy a dollar for seventy cents. 

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