Romania: Fondul Proprietatea to sell part of its OMV Petrom stake via public offering

, SEE Energy News

Franklin Templeton, Manager of the largest investment fund in Romania Fondul Proprietatea, announced that the fund will sell part of its stake in the Romanian subsidiary of Austrian OMV Group – OMV Petrom via secondary public offering on the Bucharest Stock Exchange and London Stock Exchange. The offering is expected to be completed in the fourth quarter of 2016.

Templeton said that the offering will consist of the fund’s owned shares only. The company will not raise new capital in connection with the public offering and will not receive any of the proceeds from it. With this partial exit, Fondul Proprietatea aims to enhance the trading liquidity of OMV Petrom’s shares while remaining committed as a long-term core shareholder to its successful development. The fund has not announced how many of its shares it plans to sell through this public offering.

OMV Petrom, which has been the most valuable company in Romania for several years, recorded a drop of almost 50 % in its share’s value in the past two years, as the decline in international oil prices severely impacted the company’s profitability. OMV Petrom is currently valued at about 3.2 billion euros, thus making Fondul Proprietatea’s stake in the company worth about 600 million euros.

The European Bank for Reconstruction and Development (EBRD) sold its 2.4 % stake in OMV Petrom via two private placement on the Bucharest Stock Exchange in 2012 and 2013, yielding about 105 million euros. Fondul Proprietatea also sold 1.11 % stake in the company for 57 million euros in 2013. However, in July 2011, the Romanian state failed to sell a stake of 9.84 % in OMV Petrom on the Bucharest Stock Exchange.

The majority owner of OMV Petrom is Austrian OMV Group with 51.01 % of the shares, the Romanian state holds 20.64 % stake, while Fondul Proprietatea has 18.99 % of the shares and it is believed that the fund is planning to lower its stake below 15 %.

In the first half of the year, OMV Petrom recorded a net profit of 90 million euros, which is 61 % less than in the same period in 2015. The clean net profit amounted to 102 million euros (50 % lower than in the first half of 2015), while the company’s sales amounted to 1.6 billion euros in the first six months of 2016 or 18 % less than in comparative period last year.