The 6% stake in BCR creating discord at the top of SIF Oltenia

Consensus is no longer at home on the Board of Directors of SIF5 Oltenia.

In the market, there are rumors that the disagreements have occurred because president Tudor Ciurezu and Florin Pogonaru, one of the largest indirect shareholders of SIF5, don't seem to agree on the sale of the 6% stake in BCR, owned by the company.

The two have been allies in the elections of April 2013, when Tudor Ciurezu won another term as chairman of SIF5.

But now, the signs of a possible confrontation are beginning to appear.

In the document announcing the financial results of SIF Oltenia for the year 2013, signed by Tudor Ciurezu and vice-president Anina Radu, several paragraphs were inserted, which were strange, to say the least, when it comes to that kind of communiqués: "Concerning the dividend policy, we want to inform the investors that claims made on various occasions by the management of the company, that in the future, SIF Oltenia, will test the sustainability of an annual dividend of up to 15% of the market price of its shares, are unfounded.

Given the positive evolution of the price (as increasing the price of the stock has been one of the main objectives of the strategy), that kind of policy would lead to massive sales of assets, the sale of the important, core, interests that the company has in various companies, basically amounting to the beginning of a controlled liquidation of SIF5.

This kind of policy has not been discussed in any of the statutory bodies of SIF Oltenia, and its management considers that information as harmful, as they can manipulate investors and the trading price, which is why they do not condone them in any way".

Most likely, the document published by SIF5 is alluding to the participation of SIF Oltenia, at the "Romania Investor Days" event, organized in the beginning of the month, in New York, by the Bucharest Stock Exchange, The Proprietatea Fund and Raiffeisen Bank. At the event, SIF5 was represented by board member Ana Bobircă, president of the Investment Committee of the "Business Capital for Romania Opportunity Fund" (controlled by BCR and Florin Pogonaru).

A notification after the event, sent by Raiffeisen to the investors, presents a brief of the talks carried out in New York. When it comes to SIF Oltenia, it is written: "- management is considering relocating in Bucharest (from Craiova); it has the largest exposure to Romanian blue chips among the SIFs; management costs have been cut, starting in spring 2013; shareholders are encouraged to participate in the general shareholder meeting, and several proposals for doing so are being discussed, including a share capital increase to dilute inactive shareholders; - a few proposals will be brought to the attention of shareholders of the payment of the dividend for the year 2013 - between 60 and 90%; concerning the stake in BCR: negotiations are taking place concerning the structure of the deal".

After the General Shareholder Meeting of April 2013, the president of SIF Oltenia Tudor Ciurezu told us that he would "comply with the development strategy for the current year, adopted by the shareholders, which involves, among other things, continuing the negotiations with Erste to sell its stake in BCR".

SIF5 Oltenia is the only one of the five SIFs that did not sell its stake in BCR, following the agreement with "Erste Bank".

After the face-offs at SIF1 Banat Crişana, SIF4 Muntenia and SIF2 Moldova, of the past few years, the "stage" could move to SIF5 Oltenia this year. It remains to be seen what decisions the shareholders will make, or more specifically what support the two opponents will be able to muster, or what aces they will pull from up their sleeves. That is, if the negotiations between the two don't somehow end behind closed doors, before they begin.

The preliminary net profit of SIF Oltenia, at the end of last year was 129.99 million lei, up 47.09% compared to the end of 2012, when it stood at 88 million lei, thus exceeding the forecasted profit for 2013 by 43.93%.