Romania’s capital market regulator says no to Fondul Proprietatea’s London listing

Romania’s Financial Supervisory Authority (ASF) rejected, on Wednesday, November 27, the new regulation which should have allowed a company listed on the Bucharest Stock Exchange (BVB) to get listed on another market in the EU via depository interests (DIs).

This decision of the ASF cancels local investment fund Fondul Proprietatea’s plans of getting listed on the London Stock Exchange by the end of this year.

ASF officially announced that the new regulation on the secondary listing of local companies on another market in the EU, via DIs, didn’t get the majority votes from the members of ASF’s council.

Fondul Proprietatea’s manager, American group Franklin Templeton, was counting on the fund’s secondary listing in London to attract new investors in the fund. This was supposed to help it reduce the discount between the fund’s share price and its net asset value (NAV) per share, which currently stands at about 22% (as of November 27).

Franklin Templeton, which has been managing Fondul Proprietatea, the largest closed-end investment fund in the region, for the last four years, recently got a two-year mandate extension from the fund’s shareholders, but under much stricter conditions. The manager must get the discount between the share price and the NAV per share under 15% and keep it there.

Franklin Templeton planned to achieve this by continuing the fund’s buyback programs, one of which is ongoing right now, by selling assets and distributing cash to the fund’s shareholders, as well as by attracting new investors via the secondary listing in London.

The London listing was approved by the fund’s shareholders in April this year and was supposed to be carried out by the end of this year. Franklin Templeton mandated British firm Jefferies International Limited and local BRD Societe Generale and Swiss Capital to prepare the listing in London. The documentation for the listing was ready in September and all that was needed was the ASF’s approval for the depository interests. The fund’s manager had even agreed with the Lonson Stock Exchange on the ticker that the fund would use in Lodnon (FP.).

This is the second failed international listing attempt for Fondul Proprietatea. The fund’s manager initially wanted to make the secondary listing of the fund in Warsaw, but this too was blocked by the Romanian regulator.

Andrei Chirileasa, [email protected]

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