Fondul Proprietatea has appointed The Bank of New York Mellon to act as the depositary bank for its global depository receipts (GDRs) for the secondary listing on the London Stock Exchange (LSE).

The fund’s manager Franklin Templeton expects the London listing to take place “on or around 29 April 2015”, according to a report on the Bucharest Stock Exchange.

Fondul Proprietatea’s shares have been trading on the Bucharest Stock Exchange (BVB) since January 2011. The fund is the third largest local issuer on the BVB, with a market capitalization of EUR 2.45 billion, and its shares are the most traded instruments on the market, with an average daily trading value of some EUR 2 million in 2015.

In April 2014, the fund’s shareholders mandated Franklin Templeton to finalize the fund’s listing in London by the end of 2014. The deadline could not be met because the Romanian Financial Supervisory Authority (ASF) didn’t finalize the necessary regulations so that the fund would float via depository interests (DIs), a type of financial instruments more similar to ordinary shares than the GDRs.

In January 2015, Fondul Proprietatea’s shareholders extended the deadline for the London listing to July 2015. The fund’s manager decided to list the fund via GDRs in order to finalize the operation in May, at the latest.

Franklin Templeton hopes that the secondary listing will help the fund attract new investors in London, some which are not yet active on the Bucharest Stock Exchange, and that this will help it lower the discount at which the fund’s shares are currently trading (to its net asset value per share), which is currently about 24%.

Fondul Proprietatea’s net assets were EUR 2.86 billion, as of March 31, 2015. Its most valuable assets were stakes in oil and gas group OMV Petrom, electricity producer Hidroelectrica and gas producer Romgaz, which accounted for almost 60% of the NAV.

The fund’s biggest shareholder is American hedge fund Elliott, which holds 17.67% of the fund’s shares and a little over 20% of its voting rights, according to a recent report on the Bucharest Stock Exchange.

British firm Jefferies International Limited, Romanian bank BRD and local brokerage firm Swiss Capital are the fund’s consultants for the London listing. Law firm Clifford Chance Badea is the legal advisor.

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Andrei Chirileasa, andrei@romania-insider.com