Wednesday, April 27, 2016

Fondul Proprietatea sells stake in ROMGAZ for $137 million

Link:

Franklin Templeton Investment Management Ltd. United Kingdom Bucharest Branch, in its capacity as Investment Manager of Fondul Proprietatea SA (“the Fund”), announces the agreement to sell an aggregate of 22,542,960 existing shares in S.N.G.N. ROMGAZ S.A. (“Romgaz”) (20,286,910 in the form of Shares and 2,256,050 in the form of Global Depositary Receipts, aggregate representing 100% of the Fund’s participation in Romgaz) to qualified investors and certain other investors not exceeding 150 natural or legal persons per Member State, other than qualified investors (all within the meaning of paragraphs (2)(a) and (2)(b) of Article 3 of the Prospectus Directive) (the "Transaction").


The shares were priced at RON 24.00 and USD 6.09 (in relation to disposals via dollar-denominated Global Depositary Receipts, based on the National Bank of Romania’s exchange rate of RON 3.9434 per USD as of 20 April 2016). The gross proceeds of the Transaction amount to RON 541,031,040 / USD 137,199,128.

This transaction represents the carrying out of the mandate by the funds investors to maximize shareholder value in Fondul. I expect the stock buybacks to continue. The current discount to the net asset value is 31%. I will buy a dollar for $.69 every time I can. As the fund continues to buy back shares I expect that eventually the discount will shrink. The economy in Romania is growing around 4% and the fund is paying a dividend so we get paid to wait while the management closes the discount. 


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