Fondul Proprietatea is also asking state-run oil products transmission company Conpet (COTE.RO) to pay an additional RON70 million from its reserves on top of the dividends the management already proposed from the 2011 profit.
Azomures and Conpet are two of the most profitable companies on the Bucharest Stock Exchange, and both of them are sitting on a lot of cash. Fondul Proprietatea manager, Franklin Templeton, believes that there is no reason why the companies should be keeping this much cash considering that they have not announced any major investment plans thus far.
Azomures posted record net profit of RON365 million last year and had RON231 million in its accounts at the end of the year. The company, recently taken over by Swiss-held Ameropa Holding, had proposed that the profit remain with the company. Fondul Proprietatea requested that the general meeting of shareholders discuss paying RON219 million in dividends. If the majority shareholder agrees, then the fund could collect about RON24 million for its 11%.
As for Conpet, things are a little bit different. The management proposed paying RON22.3 million dividends of last year’s profit, of which the fund should get some RON6.6 million for its 29.7% stake. Yet the fund requested additional dividends worth RON70 million be paid from the company’s reserves, as Conpet had more than RON200 million in cash at the end of last year. The fund made a similar request last year but the Economy Ministry, which owns the controlling interests in Conpet said no. Were the proposal approved, the fund should collect an additional RON20.8 million.
These dividends should add to those the fund can count on at the moment, and boost its revenue to more than RON600 million, RON80 million above last year’s level, according to ZF’s calculations based on the data available at the moment.
The fund will get gross dividends of RON353 million from Petrom, the largest company in its portfolio, alone, RON153 million more than last year. Fondul Proprietatea owns 20.1% in Petrom. The dividends from the 2011 profits of Romgaz and Transgaz are estimated to be close to the 2010 level.
It will get less from Hidroelectrica, after the electricity producer’s profit plummeted last year, but will get more money from Alro, which posted higher profit and where the fund bought shares in the past year, as well as from Transelectrica, which posted higher profit, too.
Fondul Proprietatea also expects higher dividends from BRD or from Raiffeisen International but will get nothing from Erste, which ended the year in the red.
The amount of dividends to be paid by electricity distributors part of the Enel group, gas distribution company GDF Suez Energy and the Bucharest Airports National Company is yet unknown. These companies put RON53 million into the fund’s accounts last year. Were they to pay as much as they did last year, the fund’s total revenue from dividends should exceed RON650 million.
Fondul Proprietatea’s dividends are important because it uses them to pay dividends to its own shareholders. The fund got RON519 million in dividends (RON436 million in net amount) in 2011 and ended the year with RON543 million in net profit, almost all of which will go the shareholders.
Franklin Templeton in turn is under pressure from its main shareholders to give them as much money as possible, and US hedging fund Elliott went as far as to suggest during the latest general meeting of shareholders that Fondul Proprietatea sell some of its assets and give the cash thereof to shareholders.
Fondul Proprietatea has EUR3.6 billion in assets and a capitalization of EUR1.78 billion. (EUR1=RON4.3741)
(English version by Loredana Fratila-Cristescu)