FP mulls selling its stake in Constanta Port through IPO

Fondul Proprietatea (FP) is reportedly willing to sell its 20% stake in Compania Națională Administrația Porturilor Maritime, the Romanian state-owned company operating the port of Constanța.

The company’s shares are split between the Ministry of Transportation, with 80%, and Fondul Proprietatea, which owns 20%. The latter is willing to sell its holdings, but has not yet taken any steps in this regard, Daniel Naftali, the senior vice president of fund manager Franklin Templeton Bucharest, told Profit.ro.

“In the current geopolitical and economic context, [the port’s] strategic and economic importance in the area has increased even more, and its growth potential is very high. It is a profitable company, which over time has given very good results. Its ability to generate cash flow and dividends for shareholders, combined with the growth opportunities we see, can result in an extraordinary IPO story,” Naftali said.

The traffic of goods through the Port of Constanța increased by about 17% in the first half of the year, reaching roughly 36.7 million tons, 12.7 million of which were cereal, including those coming from Ukraine. The company ended 2021 with a net profit of RON 130.4 mln (EUR 26.8 mln), registering a 10% increase in revenues.

Constanța has become the most important port on the Black Sea in the context of Russia’s invasion of Ukraine and its blockading of the latter’s ports, according to transport minister Sorin Grindeanu.

Nevertheless, Naftali warned that potential investors could be turned off by existing legislation limiting the dividends that can be distributed to shareholders by companies in the sector. A 2017 law stipulates that a maximum of 25% of the profit of port administrations (after taxes) can be paid back to the state or shareholders.

“It is an aspect that we have raised in the discussions with the authorities, and we believe that, for an IPO, this limitation to 25% of the dividend distribution rate should be removed from the legislation,” said the FP official.

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