The RON0.05 per share distribution is equivalent to the value of the potential 2013 dividend based on the dividend policy of the fund, Franklin Templeton Investment Management, said in a stock exchange filling.
“Such a cash distribution to shareholders is a more tax efficient option for the fund’s shareholders. Based on our current understanding of Romanian tax law, no Romanian tax will arise for the Fund or its shareholders on this distribution, which means that the net cash distribution received by the shareholders will be higher by the applicable dividend withholding rate,” it added.
Fondul Proprietatea reported a net profit of RON682.15 million in 2013, up 20.3% year-on-year.
A little over RON34.1 million will be directed to the fund’s legal reserves, while the remaining sum should be kept as unallocated retained earnings, Franklin Templeton said.
The proposal is subject to shareholder approval at a meeting scheduled for April 28.
Also in April, Franklin Templeton will submit for shareholders’ approval the authorization for a fourth share repurchase program to be launched after the fund’s third buyback program is completed or cancelled by the shareholders.
Fondul Proprietatea was set up in 2005 to compensate Romanians whose properties were seized during communism. U.S. hedging fund Elliott Associates is the fund’s largest shareholder, with a 17% stake, followed by US bank Morgan Stanley with 5%.
Since its listing in Bucharest in 2011, Fondul Proprietatea has completed two shares repurchase programs, during which it has bought back 1.74% and 8.2% of its own shares, respectively.
The fund plans to launch a third program later this year, in a move to buy back up to 252.8 million of its own shares at a price range of RON0.2 to RON1.5 a share. (EUR1=RON4.4986)