Romania's Fondul Proprietatea launches sale of stakes in Enel, Engie - fund manager

The fund manager has initiated a competitive process aimed at potential disposals of Fondul Proprietatea's stakes in E-Distributie Muntenia S.A (former ENEL DistributieMuntenia), E-Distributie Banat (former Enel Distributie Banat), E-Distributie Dobrogea (former Enel Distributie Dobrogea), EnelEnergie, Enel Energie Muntenia and in Engie Romania, it said in a statement filed with the Bucharest Stock exchange, BVB.

All holdings mentioned above represent 18.93% in the fund’s net asset value of 10.76 billion lei ($2.76 billion/2.35 billion euro) as at end-July, it added.

The process will be managed by Ithuba Capital AG acting as the fund’s sole financial adviser in connection with the envisaged transactions.

The fund has been trying to sell these assets since 2012 in an effort to limit the number of unlisted companies in its portfolio.

Fondul Proprietatea posted a net profit of 709.3 million lei in the first half of 2017, up 31% on the year.

In July, the fund initiated legal action against board members and managers of Engie Romania (formerly known as GDF Suez Romania) over management and consultancy service contracts.

Also in July, Romanian power distributor and supplier Electrica [BSE:EL] signed a 752 million lei memorandum of understanding for the buyout of minority stakes in four of its subsidiaries from Fondul Proprietatea.

Blue chip Fondul Proprietatea was set up in 2005 to compensate pre-Communist property owners for their assets nationalised after 1945.

In 2016, the fund sold a 6.4% stake in oil and gas group OMV Petrom [BSE:SNP] for 682 million lei in four separate transactions. Before the sale Fondul Proprietatea owned 19% of OMV Petrom. Also last year, Fondul Proprietatea sold its entire stake in the Romanian units of German utility E.ON - Distributie and Energie, and its entire remaining 5.85% stake in natural gas producer Romgaz [BSE:SNG] for $137.2 million (120.6 million euro).

In 2015, the fund sold its stakes in real estate company Primcom, metal forging company Forsev, market researcher SIFI CJ Agro, Electroconstructia Elco Cluj, and Petrotel Lukoil.

The fund's shares traded at 0.8690 lei by 1439 CET on Monday on the BVB.

(1 euro =4.5710 Romanian lei)