OMV Petrom, the largest oil&gas group in South-Eastern Europe (SEE) plans a secondary listing on the London Stock Exchange. Romanian investment fund Fondul Proprietatea may sell a significant stake in the company via public offering on the Bucharest Stock Exchange and London Stock Exchange.

Both OMV Petrom and Fondul Proprietatea announced their intentions on Wednesday morning, August 19, before the market opening in Bucharest. The announcements had little impact on their shares.

OMV Petrom, which is Romania’s most valuable company, with a market capitalization of EUR 4.85 billion (as of August 19), will ask its shareholders’ approval for a secondary listing in London. The general shareholders meeting is scheduled on September 22.

OMV Petrom’s majority shareholder is Austrian group OMV, which holds 51% of the company’s shares. The biggest minority shareholders are the Romanian state, via the Energy Ministry, with a 20.6% stake, and investment fund Fondul Proprietatea, which holds 19% of Petrom’s shares. The remaining 9.4% represent the free-float.

Fondul Proprietatea, which is managed by American group Franklin Templeton, has been looking for ways to divest part of its Petrom holding in order to get cash for its buyback programs and cash distributions to shareholders. The secondary listing in London would be a good opportunity for the fund to sell some of its shares, as the liquidity on the Bucharest Stock Exchange is still low.

“The fund continues to review strategic options to potentially reduce its ownership interest in OMV Petrom to below 15% of the company’s issued share capital, including via a public offering of both shares and Global Depositary Receipts representing interests in shares (GDRs), with GDRs to be listed on the London Stock Exchange,” the fund reported on Wednesday.

Fondul Proprietatea previously sold a 1.1% stake in OMV Petrom in May 2013, for EUR 57 million.

Fondul Proprietatea broke the ice this year with a secondary listing in London. The fund was the first company already listed on the Bucharest Stock Exchange that floated in London, at the end of April. Two other Romanian companies, gas producer Romgaz and electricity distributor Electrica, are also dual-listed in Bucharest and London, following initial public offerings (IPOs) in 2013 and 2014.

OMV Petrom’s shares lost almost 20% of their value in the past 12 months, as the oil price decline has strongly impacted its financials. Petrom posted a net profit of EUR 234 million in the first half of 2015, down by a quarter compared to the same period of last year.

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editor@romania-insider.com