REG - Fondul Proprietatea - Updated Annual Cash Distribution Policy

Fondul Proprietatea SAAnnouncement

18/12/2023 16:15

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RNS Number : 1971X  Fondul Proprietatea S.A.  18 December 2023

 To:       Bucharest Stock Exchange                                               Report date:

             Financial Supervisory Authority                                      18 December 2023

                London Stock Exchange

                                                                                  Name of the issuing entity:

 Current report according to Article 234 para. (1) letter k) of the Financial     Fondul Proprietatea S.A.
 Supervisory Authority Regulation no. 5/2018 on issuers of financial

 instruments and market operations, as well as the provisions of Article 99
 letter q(1)) of the Code of the Bucharest Stock Exchange, Title II, Issuers

 and Financial Instruments                                                        Registered office:

 Important events to be reported:                                                 76-80 Buzesti Street

 Updated Annual Cash Distribution Policy                                          7(th) floor, district 1,

 Franklin Templeton International Services S.À R.L., in its capacity of           Bucharest, 011017
 alternative investment fund manager and Sole Director of Fondul Proprietatea

 S.A. ("the Fund"), hereby, would like to present the updated Annual Cash
 Distribution Policy that will be implemented in the interest of the

 shareholders of the Fund.                                                        Phone/fax number:

                                                                                  Tel.: + 40 21 200 96 00

 Thus, the Fund Manager remains committed to returning cash to shareholders on    Fax: +40 31 630 00 48
 an annual basis (subject to applicable law and necessary approvals, to any

 restrictions under Romanian legal or tax regulations and subject to available
 financing sources) and has amended the Fund's Annual Cash Distribution Policy,

 as enclosed in the Annex to this report.                                         Email:

                                                                                  office@fondulproprietatea.ro (mailto:office@fondulproprietatea.ro)

 Franklin Templeton International Services S.À R.L, in its capacity of            Internet:
 alternative investment fund manager and sole director of FONDUL PROPRIETATEA

 S.A.                                                                             www.fondulproprietatea.ro (http://www.fondulproprietatea.ro)

 Johan MEYER                                                                      Sole Registration Code with the Trade Register Office:

 Permanent Representative                                                         18253260

                                                                                  Order number in the Trade Register:

                                                                                  J40/21901/2005

                                                                                  Subscribed and paid-up share capital:

                                                                                  RON 2,947,779,186.56

                                                                                  Number of shares in issue and paid-up:

                                                                                  5,668,806,128

                                                                                  Regulated market on which the issued securities are traded:

                                                                                  Shares on Bucharest Stock Exchange

                                                                                  GDRs on London Stock Exchange

ANNUAL CASH DISTRIBUTION POLICY 1  (#_ftn1)

 

 

1.   Scope

 

In order to comply with the requirements of Bucharest Stock Exchange Code of
Corporate Governance and in accordance with the Investment Policy Statement
("IPS"), Fondul Proprietatea SA (the "Fund") decided to adopt this Annual Cash
Distribution Policy ("ACDP").

 

The scope of this Policy is to set a series of guidelines and principles on
the cash distributions made by the Fund.

 

2.   General principles

 

In accordance with the IPS, the Alternative Investment Fund Manager (the "Fund
Manager") may propose cash distributions for shareholders' approvals. The
level of such cash distributions is proposed by the Fund Manager by applying
this ACDP and in correlation with the other on-going Discount Control
Mechanism measures (e.g. buy-backs).

 

The Fund Manager intends to recommend to shareholders for their approval cash
distributions, on an annual basis, subject to applicable law and necessary
approvals, to any restrictions under Romanian legal or tax regulations and
subject to available financing sources.

 

Under exceptional market conditions or circumstances (e.g. events that may
significantly impact the discount), the Fund Manager may propose a change of
the mix of cash distribution and share buy-backs to allocate more of the
distributable cash towards share buy-backs, if it considers this to be in the
best interest of the Fund's shareholders to enhance shareholder value.

 

ACDP does not limit additional cash distributions and share buy-backs that can
be recommended by the Fund Manager separately, subject to available financing
sources, regulatory and corporate approvals and depending on the discount
level, in accordance with the IPS and the Discount Control Mechanism.

 

The Fund Manager will include in its periodical reports (annual report,
quarterly reports and semi-annual report) as well in the announcement
('current report') for completing a certain material transaction the use of
proceeds from such transaction.

 

3.   Cash distributions

 

Under current Romanian legislation and of the Constitutive Act, each fully
paid share gives its owner the right to receive cash distributions (in the
form of dividends or other types of cash distributions, such as return of
capital). Unpaid shares and treasury shares will not be entitled to receive
cash distributions.

 

Cash distributions are paid to the shareholders on a pro rata basis,
proportionately to their participation in the paid share capital of the Fund.

 

a.   Dividend distributions

 

In the absence of exceptional market conditions or circumstances, and subject
to any restrictions under Romanian legal or tax regulations and subject to
available financing sources, in case of dividend distributions (where
permitted by applicable law), the distributable amount is calculated by the
Fund Manager and proposed for shareholders' approval as sum of the following
elements:

i.    the Fund's annual dividend income from portfolio companies, except
special cash distributions,

ii.    plus interest on cash balances,

iii.   less operating and financing expenses and taxation and

iv.   less compulsory allocations to reserves according to the regulations
in force.

 

For the purpose of this policy, the special cash distributions are the amounts
distributed by the portfolio companies from other sources than the annual net
profit included in the latest annual financial statements.

 

The Fund Manager may propose the level of any dividends by considering the
on-going measures imposed by Discount Control Mechanism and the available
cash.

 

Any dividend distribution will be based on audited financial statements and
will be submitted to shareholders approval generally during the Annual GSM.
The Fund Manager does not intent to propose interim or quarterly dividends.

 

The dividends computed in accordance with the principles above can be
distributed from the annual profits and/ or from other equity elements (e.g.
retained earnings) by observing the applicable legal requirements.

 

b.   Return of capital

 

In case of a return of capital, the distributable amount is subject to the
restrictions under Romanian legislation and regulations in force and to
available funding and will be based on the Fund Manager's best estimate
according to the latest available financial statements at the time of
proposing the respective distribution for the shareholders' approval.

 

According to Article 29 of the Romanian Law no. 243/2019 on alternative
investment funds, amending and supplementing certain normative acts the return
of capital can be done as mentioned below:

 

ü With the purpose to decrease its share capital, the Fund may perform, only
once during the financial year, share capital returns pro rata with the
contributions made by the investors, subject to the approval of the
extraordinary general meeting of shareholders, in accordance with the Romanian
legal provisions in force.

 

ü By way of exception from the provisions above, with the purpose to decrease
its share capital, the Fund can perform additional share capital returns pro
rata with the shares held by the investors, if the following conditions are
cumulatively met:

a) the share capital return is approved by the Fund shareholders meeting held
according to the provisions of Romanian legislation in force;

b) the share capital return to shareholders is made exclusively from the own
sources of the Fund;

c) the Fund has recorded profit in the last 3 financial years, according to
its annual financial statements audited according to the law.

 

ü The Fund may repurchase its own shares with the purpose to decrease its
share capital if the following conditions are cumulatively met:

a) the buy-back programme is approved by the Fund shareholders meeting held
according to the provisions of Romanian legislation in force;

b) the payment of the shares thus purchased will be made exclusively from the
own sources of the Fund.

 

4.   Payment of Cash Distributions

 

The cash distributions will be proposed by the Fund Manager and paid in
compliance with the General Shareholders Meeting Resolutions under the terms
and conditions provided by Romanian law. The Fund publishes information on the
payment of dividends and other cash distributions to shareholders on the
Fund's website (www.fondulproprietatea.ro (http://www.fondulproprietatea.ro) )
in compliance with the effective laws.

 

5.   Review of the Annual Cash Distribution Policy

 

The ACDP may be revised by the Fund Manager after the consultation with the
Board of Nominees, on an annual basis, in compliance with the applicable law
and regulations or in case of new regulations or mandatory legal provisions
regarding the scope of the policy. The current Policy is published on the
Fund's website (www.fondulproprietatea.ro (http://www.fondulproprietatea.ro) )
and any update to the Policy shall be disseminated to the market and uploaded
on the website.

 

 1  (#_ftnref1) Updated as of 18 December 2023

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