During May 16 – 20, Fondul Proprietatea (FP) purchased 5.4 million GDRs (Global Depositary Receipts) for RON 3.9 million in a buy-back programme, according to information published on the Bucharest Stock Exchange (BVB).
There are 639.9 million shares left to be repurchased by FP from sixth buy-back programme, which, at the most recent average market price per security of RON 0.73/unit, is worth RON 467 million.
According to Franklin Templeton, the Fund’s Manager, bought back is the best option at the moment for investors in the current market conditions. Moreover, the buy-back programme is also carried out to reduce the trading discount from 30 percent to15 percent, which is the target required by FP’s largest shareholder, U.S. hedge fund Elliott Management.
To power the buy-back programme, FP has closed assets (in 2015, the Fund sold part of the shares in Romgaz and Primcom and entirely the stakes in Forsev, SIFI CJ Agro, Electrocostrucţia Elco Cluj and Petrotel Lukoil).
The sixth buy-back programme started on September 9, 2015, and was resumed on January 28 after these operations were suspended on January 12, the Fund intending to accelerate the sixth buy-back programme through public offer (IPO).
Due to the high volatility of equity markets, FP’s administrator decided to postpone the IPO. The sixth programme run by FP is mediated by Wood & Company Financial Services brokerage firm, headquartered in Prague.