Investors having to wait even more for the conversion of the compensation deeds into shares in the Proprietatea Fund

Former asset owners who were despoiled by the communist regime may have to wait two more months to receive their shares in the Proprietatea Fund, according to some government sources. Even though the procedure for the conversion of compensation deeds into shares in the Proprietatea Fund (FP) was resumed on May 2nd, the Government recently considered imposing a delay of up to 60 working days (calculated since the beginning of the procedure for the conversion of the compensation deeds - May 2nd) for effectively making the conversion.

The information was known by certain investors, and as a result, according to a broker, the price didn"t fall as strongly as it used to at the end of the session. In spite of this, the information was not disseminated through the Bucharest Stock Exchange and trading in the stock of the FP wasn"t halted.

Other government sources also said that the Romanian National Securities Commission will also be requested to issue an opinion on the methodology for converting the compensation deeds.

If the conversion of the compensation deeds the state will be able to earn the dividends afferent to its current stake in the Fund.

About two weeks ago, the Ministry of Finance requested that the Proprietatea Fund pay out a dividend two times higher than the one proposed by Franklin Templeton.

One of the arguments invoked by the Government to support its proposal is the fact that the price of the Proprietatea Fund could fall considerably if a large number of shares came to the market (about 1.5 billion).

Between January 11th and May 2nd, 2011, 1,450 requests opting for receiving compensation in stock in the Proprietatea Fund were received, including the requests to convert the compensation deeds in stock instead of cash.

The Ministry of Finance holds 36.79% of the share capital of the Proprietatea Fund (approximately 5 billion shares).