ARDAF potential listing surrounded by confusion

ARDAF, the fifth largest insurance-reinsurance company on the Romanian market, could be listed on Bucharest Stock Exchange by this fall, following Agras, the only insurer listed so far.

Although the main shareholder, SIF Transilvania, supports this project, the company management is seemingly not aware of it.

Under the circumstances, ARDAF General Assembly of Shareholders called for next Tuesday may have a few surprises in store.

“Apart from attracting a foreign investor, our plans include having ARDAF listed on the Stock Exchange, some time by the end of the year,” Mihai Fercala, SIF Transilvania president, told Ziarul Financiar.

He says that financial investment companies in general, and SIF Transilvania in particular, favour the listing of companies in which they hold stakes, which provides for a more flexible shareholding structure.

“We will analyse the exact situation of the company during the summer, we will proceed to the share capital increase as announced and only then float it,” says the representative of SIF Transilvania, the main shareholder.

ARDAF management has not been informed of the flotation prospect. “It is precisely the ARDAF shareholders who said no to the company going public,” Steluta Racolta, ARDAF president, told Ziarul Financiar.

The main ARDAF shareholder is SIF Transilvania with 41%, along with Dacia Felix that holds 16.45%, Astra Romana Capital (13.5%) based in Luxembourg and currently under judicial liquidation, Fondul Mutual al Oamenilor de Afaceri (Mutual Businessmen Fund) managed by SAFI Invest that holds 13%, SIF Banat-Crisana with 5.6%, Rompetrol, owning 3.5% and SIF Muntenia with 1-2%.

“It is precisely them who do not want it. It may be a good solution in other cases, but not for ARDAF,” ARDAF president added. She claims that “the shares lack liquidity; with this slow motion, listing the shares is highly unlikely.”

The AGA summoned on Tuesday will probably discuss the share capital increase announced last fall. ARDAF is planning to increase its share capital from 37bn lei to about 80bn lei by bringing a foreign investor on board, if possible.

“We need no flotation to increase our capital. We chose another option,” Steluta Racolta stated. Mihai Fercala says ARDAF is being wooed by an American investment fund already operating in Romania, which could come up with about $50 million.

At the same time, the company is trying to complete negotiations with Australia-based QBE Group that is supposed to become the main shareholder by participating in ARDAF’s capital increase. The talks, started last fall, are slow to progress, though.