Romanian Fondul Proprietatea sells stake in oil pipe operator, reaches EUR 240 mln revenues from asset sales

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Romanian investment fund Fondul Proprietatea (FP), which is managed by American group Franklin Templeton, sold a 23.6% stake in Romanian oil transport company Conpet Ploiesti via a private placement.

The fund got EUR 22.5 million from this sale, according to an announcement made on Bucharest Stock Exchange (BVB). This new transaction brings the fund’s total asset sales this year to over EUR 240 million.

The fund sold the shares for a price of RON 48.75, which is 8% lower than the closing price registered for Conpet’s shares on November 11, before FP announced its intention to sell the stake. The sale was made via a private placement, which was addressed to qualified investors only. The deal was managed by Czech brokerage firm Wood&Company Financial Services and local bank BRD-Societe Generale.

Following this transaction, Fondul Proprietatea reduced its stake in Conpet from 29.7% to 6.1%. Conpet is a state-controlled company which operates the oil transport pipes in Romania. The company had EUR 79 million in sales and a EUR 7.3 million net profit last year. The company had EUR 68 million cash reserves at the end of June 2014. It currently has a market capitalization of EUR 100 million.

Fondul Proprietatea previously sold a 5% stake in gas producer Romgaz, in June this year, for EUR 147 million. The fund also sold its 15% stake in electricity transporter Transelectrica, in July, for EUR 48 million. The fund’s revenues from asset sales were EUR 220 million in the first nine months.

Much of this money will be distributed to shareholders, either via share repurchases or via capital decreases. The fund currently has an ongoing buyback offer for its own shares worth EUR 186 million. The offer ends on December 2.

Fondul Proprietatea had total revenues of EUR 384 million, in the first nine months of this year, 84% higher compared to the same period of 2013. Revenues from dividends amounted to EUR 151 million, 8% higher than in the first nine months of 2013.

The fund made a net profit of EUR 222 million, which was also 84% higher than the profit for the first three quarters of last year.

The fund had EUR 3.22 billion in net assets under management, at the end of October. The fund’s capitalization is EUR 2.66 billion. The fund’s shares are currently trading at a discount to its net asset value per share of 22% (as of November 13, 2014).

The fund’s main shareholder is American hedge fund Elliott, which holds 17% of the fund’s shares. Foreign institutional investors own 60% of the fund’s shares (as of October 31, 2014).

Andrei Chirileasa, [email protected]

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