Reimbursement for confiscated property could redraw rich list

The value, calculated in euros, of the largest reimbursement certificate issued by the Romanian state for property seized abusively during the communist regime is a figure of no less than nine-digits. As a result, the process of reimbursing the former owners whose buildings cannot be given back looks set to cause changes in the ranking of the richest Romanians.

The owners of those buildings that cannot be given back in themselves receive shares in the Property Fund (FP) as compensation, to which the state contributes its stakes held in some of the biggest Romanian companies, stakes that are worth several billion euros.

“The largest reimbursement certificate I have seen is worth 100 million euros. This does not mean it is actually the largest,” Nicolae Ivan told ZIARUL FINANCIAR. Ivan was appointed as chairman of this fund”s Supervisory Board at the end of last year. The reimbursement certificate worth 100 million euros will probably account for less than 2% of the fund”s shares, with the fund being the largest business on the financial market in Romania over the next few years.

No less than seven out of the top ten banks are currently vying for a service contract with the fund, whose assets could reach as much as 6bn euros.

“We are now in talks with seven banks to choose one that will handle the distribution of fund shares to the reimbursement certificate holders. All the future operations of the fund should be carried through the bank we will choose, in the sense that there will be an account used for all the transactions, so that we can supervise the activity of the manager,” the FP chairman says.

The fund, which is the largest in Central and Eastern Europe, is to be managed by a specialised international company, as the management, appointed by the state, has only been given supervisory duties, and may later be replaced by shareholders.

“We are now working on building a portfolio, by taking over the stakes, half of which we have already taken over; on the selection of a consultant to organise the tender to select a management company; and on turning the reimbursement certificates into shares,” Ivan says.

The fund was established with a share capital worth 3.99bn euros in RON equivalent, which accounts for stakes taken over from the state.

The capital can be increased by adding further assets to it, if the reimbursement applications exceed the initial capital. Ivan estimates such applications, many of which are now waiting to be settled in the courts, could eventually amount to 5-6bn euros. He also believes the fund could have 120,000 to 180,000 shareholders.

The former owners have received, or will receive, the so-called “reimbursement certificates”, which they will be able to sell after conversion into FP shares and the listing of this fund on the Bucharest Stock Exchange.

Ivan says the fund could be listed in the middle of this year, possibly both on the Bucharest Stock Exchange and on a foreign market. vlad.nicolaescu@zf.ro