HAS GREG KONIECZNY CHANGED HIS MIND? Remus Borza: "We are in talks with the Proprietatea Fund for the sale of 25% of Polisano"

Greg Konieczny, the manager of the Proprietatea Fund, and his team have repeated almost obsessively, that they would make no investments other than in their own shares, until the discount between the price of the stock and the NAV fell considerably.

Nevertheless, Remus Borza, the president of Polisano, yesterday told us that he is in talks with the Proprietatea Fund for the sale of 25% of the company, for 30 million Euros.

Could Franklin Templeton have changed its mind at the end of its mandate, as shareholders are set to decide its fate, in October's General Shareholder Meeting, and the administrator is showing up for the "evaluation" without having accomplished the goal of reducing the NAV discount?

Or could Polisano be a better investment option than the Proprietatea Fund itself?

In September 2014, Franklin Templeton has changed the Annual Cash Distribution Policy of the Proprietatea Fund, and it proposed to shareholders the distribution of the Fund's profits, either as a dividend, or through a refund to shareholders.

An acquisition for the portfolio of the Proprietatea Fund would go against this commitment, as well as the statements made by the representatives of the Fund that the FP shares are the best investment option available at this moment.

By the time our newspaper had gone to print, the representatives of the Fund had not yet sent us information on this issue.

Remus Borza has announced, since back in May, that he has found an investment fund that is willing to enter the shareholder structure of the Polisano Group, controlled by the Vonica family of Sibiu. At the time, the chairman of Polisano never mentioned the name of the fund, which according to the press, would acquire shares in a new company, Polisano SA, which owns the full stake in four companies: Polisano SRL (drug distribution), Clinica Polisano SRL (clinics and hospitals), Polisano Pharmaceuticals (production) and Sibpharmamed (the Polisano drug stores).

Aside from the Polisano business, Remus Borza and the Proprietatea Fund have a common interest in Hidroelectrica, with the former being the bankruptcy trustee, while FP holds a 20% stake in the company.

In June, Remus Borza came out with a shocking statement, announcing that he intended to "take an arrogant action", by listing the company on the stock exchange, even though it was in insolvency.

Even though several market specialists have completely rejected that idea, because on one hand the foreign funds have clear criteria for selecting investments, and on the other hand, insolvency would substantially reduce the company's valuation, Greg Konieczny, the manager of the Proprietatea Fund, told us in an interview, in August, that the option of taking Hidroelectrica public while in insolvency should not be ruled out, even though it would be the second option.

The shareholders of the Proprietatea Fund were summoned on October 29th, to decide the fate of the administrator of Franklin Templeton, after the biggest shareholder of the Proprietatea Fund, Elliott Associates gave it a term of just two years in November 2013, and set performance requirements for them.

The General Shareholder Meeting of the Proprietatea Fund will decide whether it extends by two more years the term of Franklin Templeton or whether it gets terminated and a new administrator is selected.

According to the decision of 2013, Elliott wanted the discount between the shares of FP on the stock exchange and the NAVPS not exceed 15% on a maximum of two thirds of the trading sessions between October 1st 2014 - and June 30th 2015. Also, the adjusted NAV on June 30 2015, was expected to be higher than on September 30th, 2013.

According to information in the press, Remus Borza took over the management of Polisano in August 2014, three months after the founder's death, when the group had entered a delicate situation.

Ilie Vonica committed suicide in May 2014 after his wife Ioana Vonica was arrested in the case of false recipes in which the group's drug stores issued fictitious invoices for the acquisition of drugs from fictitious companies.