A race against the clock for the listing of the Proprietatea Fund

Grzegorz Konieczny, the executive vice president/managing director of Franklin Templeton, yesterday presented for the first time the schedule for the listing of the Proprietatea Fund on the Bucharest Stock Exchange, and said he expects the Fund to be listed on the BSE around January 25th. The schedule of the listing is extremely tight and reveals the great pressure that the manager of the fund is under to meet the requirement to get the Fund listed within 90 days after taking over its management. The representatives of Franklin Templeton, as well as those of "Raiffeisen Capital &Investment", members of the consortium that intermediates the listing, yesterday said that they have been working as much as 12 hours a day to meet the deadline. The analysts of the Fund have evaluated 70 of the 83 companies in the Fund"s portfolio, which account for about 99% of the value of the Fund"s net assets.

On Friday, Franklin Templeton is scheduled to file the prospectus for the listing of the Fund with the Romanian National Securities Commission (CNVM), which will have until December 22nd to approve it. One day later, on December 23rd, the prospectus will be submitted with the Bucharest Stock Exchange, according to the schedule for the listing. Between January 10 and January 31st, the representatives of Franklin Templeton and the intermediaries of the listing will go on roadshows across Romania and the rest of Europe to attract investors. Franklin Templeton intends to hold roadshows in ten European cities, as for now it can"t seek investors in the United States as it would have to draw up a revised prospectus to comply with US regulations.

Grzegorz Konieczny yesterday said that the manager of the Proprietatea Fund does not place a major importance on the price of the Fund"s shares on the first day and said that the goal of Franklin Templeton is to create value, which is something that takes time.

"The price of the stock on the first day will not be set in stone; it will fluctuate due to supply and demand, as well as thanks to the evolution of the stock market or of other factors. If the price drops too low, we can activate the option to buy back about 10% of the share capital, which the shareholders previously approved", Konieczny said.

• Franklin Templeton of the two "champion" energy companies: "We want to prevent the Government from making a big mistake"

On his first public appearance after having taken over the management of the Proprietatea Fund, the vicepresident of Franklin Templeton criticized the government"s plans to set up the two "energy champions", "Electra" and "Hidroenergetica".

"We want to prevent the Government from making a big mistake. If the merger of the energy companies in order to create the two champions will take place according to the plan of the state, we run the risk of having the two companies running into grave problems. In our opinion, some of them should be restructured. We have not yet reached an agreement with the Ministry of the Economy on this matter", said the manager of the Proprietatea Fund.

Franklin Templeton requested that the Ministry of the Economy conclude an agreement by which the state would be required to list the two energy "colossi" on the Bucharest Stock Exchange within the next 24 months as well as accept a dual management system, independent management and a mutual consent on any plans concerning the budget or the investments of the new companies.

Konieczny also warned that energy produced by "Hidroelectrica" is more expensive than that produced by similar companies in other countries, which raises questions about what is happening with the company.

"Perhaps in Romania, water is more expensive and that"s why the production costs are higher at Hidroelectrica", the representative of Franklin Templeton said, ironically.

The shareholders of the "Proprietatea Fund" approved during yesterday"s General Shareholder Meeting, several changes of the Articles of Incorporation of the Fund, and have approved for the second time the Articles of Incorporation of the Fund, therefore essentially eliminating the merit of the lawsuit filed by one of the shareholders of the Fund against Franklin Templeton.