Romanian Fondul Proprietatea headed for London Stock Exchange listing

Franklin Templeton, fund manager of Romanian investment fund Fondul Proprietatea, has recommended shareholders to pursue listing of the fund’s shares on the London Stock Exchange’s Specialist Fund Market by the end of 2014. Shareholders in Fondul Proprietatea will get to decide about the potential listing at their April 28 meeting.

The American fund manager has already selected a consortium made of Jefferies International Limited, BRD Societe Generale, Swiss Capital and Clifford Chance Badea law firm, to support it in the secondary listing of the fund’s shares.

Fondul Proprietatea’s shares have been trading on the Bucharest Stock Exchange since 2011.

Romania’s most recent listing on the London Stock Exchange was that of Romgaz in 2013.

The London listing would be done via the Depositary Interest in UK. ‘To this end, a depositary registered in UK will connect the London and Bucharest markets by owning shares via a custodian headquartered in Bucharest, via Clearstream, connected to the Bucharest depositary ,” according to the Fondul Proprietatea statement.

Alternatively, the listing can also be done via Global Depository Receipts (GDR), which is however restricted in Romania to Initial Public Offerings (IPO). To be able to issues GDRs, the Romanian law would need to be altered, or the Romanian Financial Surveillance Authority ASF would have to greenlight an exception for the fund.

In 2013, Franklin Templeton decided to discard its previous idea of listing Fondul Proprietatea on the Warsaw Stock Exchange, and said it would rather target London or New York instead.

Fondul Proprietatea was created in 2005 as a joint stock company with a special purpose to provide compensation to the people whose real estate assets had been confiscated by the Romanian state during the communist regime and who can no longer receive restitution in kind.

Romanian investment fund Fondul Proprietatea recorded a net profit of some EUR 117 million (RON 514 million) in the first half of 2013, a year-on-year decrease of some 10 percent, while its revenues from current activity went up 3 percent, to around EUR 222 million (RON 874 million).

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