Romania’s Property Fund to sell part of or entire 15% stake in gas transport firm Transgaz

By bne IntelliNews December 5, 2013

Romania’s restitution Property Fund [Fondul Proprietatea] has hired Citigroup Global Markets, Raiffeisen Capital & Investment and Wood & Company to evaluate the option of selling part of or the whole 14.99% stake held at local natural gas transport company Transgaz, news agency Mediafax reported.

The full stake has a market value of RON 336mn [EUR 75.16mn] at December 4 price on the local stock exchange where the company’s shares are traded.

The purpose of the deal would be “increasing the value [of the fund’s shares] and increasing the liquidity of the fund’s assets,” its manager Franklin Templeton explained in a letter sent to the stock exchange.

The Fund’s shareholders have extended by two years the management contract with Franklin Templeton, effective as of autumn 2014 [when the current management contract expires] but set high targets to be met. Among the targets, the manager has to narrow the discount at which the Fund’s shares are traded [from current 30% - between the market price and the net value of the assets].

The Fund’s shareholders decided in November on a new buyback programme, which explains the need for cash liquidity. The Fund will start a new buyback campaign after the current one completes. It started an 18-month, 10% buyback programme in April 2012 and recently completed a 4.35% buyback campaign – as part of the 10% programme. The buyback programmes are financed via the sale of assets in the Fund’s portfolio.

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