FP starts the administrator selection procedure

The Committee of Representatives of Fondul Proprietatea (FP) is starting the selection procedure of an alternative investment fund manager (AFIA) for FP, according to a report of the issuer published, yesterday, on the website of the Bucharest Stock Exchange (BVB).

In addition, the Committee will carry out the selection procedure using the services of the selection consultant Numis Securities Limited, a member of the Deutsche Bank Group, according to the shareholders' resolutions of September 27, when a number of selection criteria were also approved.

According to one criterion, the FP administrator should focus mainly on "continuing investments in domestic entities, including state-owned enterprises, which may involve additional direct or indirect investments in unlisted entities". The lack of investment is the main reproach that the Ministry of Finance, which controls 11% of FP's voting rights, brought to the current administrator Franklin Templeton, who opted for asset sales and cash returns to shareholders or buybacks of own shares and reductions of share capital, with the argument that, in this way, it obtains the highest return for shareholders.

According to another criterion, the FP administrator must operate at global standards in terms of asset management, client service, compliance, financial reporting, investor relations and risk management and have experience and expertise in mandates invested in Romania and/or markets similar.

Potential candidates can submit their intention to participate in the selection operation to Deutsche Numis no later than October 21, 2024, the BVB report also states.

At the end of last month, FP shareholders extended Franklin Templeton's administrator mandate for another year, i.e. until March 2026, and rejected the Ministry of Finance's request regarding the preservation of the fund's current assets and the ban on share buybacks. They also elected Ileana-Lăcrămioara Isărescu, the daughter of the BNR governor, Mugur Isărescu, to the FP Representatives Committee for a three-year term, while the second available place on the board remained vacant, as none of the candidates met the required number of votes.

For the month of August, the fund reported a Net Asset Unit Value of 0.6621 lei, which, compared to yesterday's lunchtime share price of 0.3586 lei, equates to a trading discount of around 46%. The stock market valuation of Fondul Proprietatea amounts to approximately 1.28 billion lei.