Sale of 5% stake in Romanian investment fund ROCA turns uncertain

The purchase of a 5% stake in Romanian investment fund ROCA by local prefabricated elements producer Prebet, for EUR 2.1 mln, turned uncertain after a member of Prebet's board disclosed that a majority of board's members had voted against the deal.

Nicolae Ratiu, the company's former chairman, accuses the current head of the board, Mathe Francisc, of forcing a deal under which Prebet would pay 2.5 times the book value for the 5% stake in the investment fund, Ziarul Financiar reported.

"The price of the transaction recognizes the valuation of the companies in which ROCA holds shares at EUR 42 mln," said Rudolf Vizental, CEO of ROCA Investments, when the deal was first announced. This is "an unprecedented premium for investment funds, especially for one with a portfolio formed almost entirely by unlisted companies," argues Nicolae Ratiu.

At the end of 2020, ROCA's assets were RON 87 mln (EUR 18.3 mln), up from RON 57 mln at the end of 2019. ROCA's shareholders include CIT Resources, Andrei Cionca, and PIF Industrial - the investment vehicle of Dedeman owners Dragos and Adrian Paval.

Ratiu, who was president of Prebet until February 2021, says that together with two of the five members of the company's board (which makes a majority), he voted against this transaction.

"Prebet should not claim to be an investment fund, but should invest its funds in the infrastructure supply sector in which it already operates," he stated.

According to Ratiu, the acquisition has not been completed, as it is challenged for several reasons - including by a presidential ordinance on the cancellation of voting rights.

The recent developments have increased the volatility of the Prebet shares, which are trading on the Bucharest Stock Exchange under the ticket PREB. In the last 12 months, Prebet has more than doubled its market capitalization to RON 73 mln (EUR 14.8 mln).

Last year, the company's net profit increased by 51%, to RON 8.5 mln (EUR 1.75 mln) as its sales stagnated at RON 41 mln (EUR 8.5 mln).

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