Fondul Proprietatea, between 60 and 500m euros for its own stock

Until it gets to compensate expropriated persons, Fondul Proprietatea (Property Fund-FP) will carry out an extensive own share buyback operation. The repurchase is likely to bring gains of as much as 1,400% to speculators who have taken advantage of the so far confused situation. While it was set up to compensate the victims of the communist regime whose properties were confiscated, FP now proves to be a lucrative business particularly for those who’ve profited from the numberless delayed listing operations and bought shares at prices of as much as 10% of face value. In H1, the Romanian state paid 10m euros in the account of compensations ordered by the European Court of Human Rights, with most litigations concerning property right violation, with the Court considering FP is not functional though it was set up as early as 2005. Now, the fund wants to repurchase a stake of 1.37 billion shares at the highest, accounting for 10% in the share capital, for which it is willing to pay as much as 2bn RON (around 500m euros). Formally, the move is meant to boost the price of shares when the Fund is listed on the BSE. On September 6, FP shareholders will vote on the proposal coming from Franklin Templeton management firm for the Fund to repurchase the respective stake during September 1, 2010-March 1, 2012 period. The Romanian state controls over 50% in the Fund, with the rest divided between 4,000 private shareholders. Franklin Templeton will decide whether the Fund is to launch the buyback offer ahead or after Bourse floatation.