Property Fund demands 1bn-euro guarantees

Management companies, which will take part in the tender to take over the Property Fund (Fondul Proprietatea), might have to offer guarantees worth at least one billion euros to be able to enter the competition for the fund”s administration. “We are considering asking companies for guarantees of one billion euros. We will discuss this proposition with our consultants and may ask for even higher guarantees. It is a bank guarantee that can be executed at any point if shareholders of the fund are harmed or for other obligations of the manager, which we will put down in the task book,” stated Nicolae Ivan, chairman of the Supervisory Board of the Property Fund. Ivan could not say how many investment management companies worldwide would be able to offer one billion euro guarantees to manage the fund. He did, however, say that he had been in contact with nearly 30 international administration companies and that he was expecting approximately half of them to take part in the auction. ZF