Franklin Templeton, the manager of investment fund Fondul Proprietatea, has recommended to the fund’s shareholders, such as Pillar II pension funds, mutual funds, and Silver Point Capital, to vote for the dual listing of electricity producer Hidroelectrica at the general shareholder meeting scheduled for November.
This would come against a decision of Hidroelectrica shareholders (mainly the Romanian state) which stipulates listing the company’s shares only on the Bucharest Stock Exchange. Templeton also invites shareholders to pay attention to a proposal by which the Ministry of Finance, a shareholder with 6 % at FP, wants the money from the Hidroelectrica IPO in the form of dividends disbursed quickly.
Last week, FP Vice-President Marius Dan said that if the Romanian Government continues to insist on listing the shares of Hidroelectrica only on the Bucharest Stock Exchange, the fund will have to reduce the stake put up for sale to about a half of its current stake in the company, namely to 10 %.
Under the National Recovery and Resilience Plan (PNRR), Romania’s Government committed to having floated at least 15 % of Hidroelectrica’s shares by mid-2023. Since the Government previously said that it does not plant to list any of its shares in the company, the entire 15 % will come from FP’s stake.
Dan said that, in order to demonstrate its good faith and demonstrate that the single-listing option is viable, the Government should top up FP’s 10% stake with at least 5 % of its shares under the initial public offering (IPO) expected to take place sometime in the first half of next year. He added that the fund will approach the Prime Minister and relevant Ministries in the coming weeks to discuss the recommendation for a dual listing drafted by the consortium of banks brokering the operation.
Dan said that FP is ready to list the shares as soon as possible, adding that the optimal window of opportunity is between March and April next year.