On February 16, US hedge fund Elliottt Associates, the largest shareholder in Fondul Proprietatea, proposed that manager Franklin Templeton sell some of the fund’s assets and distribute the money obtained to shareholders. In addition, as incentive, Franklin Templeton would receive an additional 1.5% commission from the sums collected.
Right now, Franklin Templeton collects a management fee of 0.479% a year from the fund’s capitalization.
Elliott Associates indirectly holds 12.57% of Proprietatea shares, through Manchester Securities and Beresford.
Elliott believes that the current formula for the calculation of the management fee collected by Franklin Templeton does not encourage Franklin Templeton to sell holdings, but to invest in order to maximize value.
The Proprietatea fund’s portfolio includes stocks in companies such as OMV Petrom (SNP.RO) – 20.1%, Romgaz – 15%, Hidroelectrica – 19.94%, Nuclearelectrica – 9.72%, Transgaz (TGN.RO) – 14.98% and Translectrica (TEL.RO) – 13.49%.
Other items on the shareholder meeting agenda include a proposition for the dismissal of the Board of Representatives members as well as the secondary listing of the Proprietatea fund in Warsaw.
Fondul Proprietatea is a closed-end investment fund created to compensate owners whose property cannot be returned in kind after being seized by the communist regime.
The fund has a share capital of 13.778 billion lei (EUR3.16 billion), divided into 13.778 billion shares with a face value of RON1.
Early Wednesday, Proprietatea shares were trading at RON0.57, up 1.9% on the day. (EUR1=RON4.348)