REG - Fondul Proprietatea - Update on the selection process for an AIFM

Fondul Proprietatea SAAnnouncement

28/03/2025 11:15

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RNS Number : 7198C  Fondul Proprietatea S.A.  28 March 2025

 To:          Bucharest Stock Exchange                                            Report date:

                 Financial Supervisory Authority                                  28 March 2025

                London Stock Exchange

                                                                                  Name of the issuing entity:

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

 operations, as well as the provisions of Article 99 letter a) 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
 Update on selection process for an alternative investment fund manager

                                                                                7(th) floor, district 1,
 Further to Resolution no. 9 / 25 September 2023 of the Ordinary General

 Meeting of Shareholders ("OGMS") of Fondul Proprietatea S.A. ("Fondul"),         Bucharest, 011017
 published on Fondul's website, the Board of Nominees ("BoN") of Fondul is

 pleased to provide the following update on the BoN led selection process for a
 new alternative investment fund manager ("AIFM") for Fondul.

                                                                                Phone/fax number:

                                                                                Tel.: + 40 21 200 96 00
 Further to the announcement on 21 January 2025, the BoN has, in collaboration

 with its selection adviser Deutsche Numis, continued to conduct in-depth         Fax: +40 31 630 00 48
 reviews of submissions from the two candidates which are:

 ·     A Luxembourg-based AIFM, in partnership with a global

 infrastructure asset manager; and                                                Email:

 ·  A Luxembourg-based AIFM, in partnership with a Romanian asset management      office@fondulproprietatea.ro (mailto:office@fondulproprietatea.ro)
 advisory firm.

                                                                                Internet:
 The review process has included (to date):

                                                                                www.fondulproprietatea.ro (http://www.fondulproprietatea.ro)
 ·    In-person sessions with the respective AIFMs and their partners,

 having as the objective the assessment of the candidates' operational
 capabilities, proposed strategies and understanding of implementation

 challenges, as well as of the Romanian legal and regulatory environment.         Sole Registration Code with the Trade Register Office:

 ·  On-site visits and assessments of the candidates EU-regulated AIFMs           18253260
 credentials.

 ·    Review of commercial terms proposed by each candidate and a request

 to each for improved terms from Fondul's perspective.                            Order number in the Trade Register:

 ·   Meetings with Numis Securities Limited ("Deutsche Numis") as selection       J40/21901/2005
 advisor to the BoN in connection with the selection process and assessment of

 each candidate.

 ·   Meetings with BoN legal advisors to discuss the candidates' regulatory       Subscribed and paid-up share capital:
 status, proposed governance structure when it comes to managing Fondul, as

 well as the alignment of the candidates' proposed investment strategies with     RON 1,849,342,164.28
 the regulatory and statutory requirements applicable to Fondul.

 After the BoN's review process, the two candidates submitted updated proposals

 that refine their previous submissions, enhancing the terms, conditions, and     Number of shares in issue and paid-up:
 overall structure in a manner favorable to Fondul.

                                                                                3,556,427,239

 Consequently, the BoN today announces that it will now commence a period of

 consultation with shareholders of Fondul ("Shareholders") for the BoN to         Regulated market on which the issued securities are traded:
 obtain Shareholders' feedback regarding the strategies proposed by the two

 candidates.                                                                      Shares on Bucharest Stock Exchange

 To facilitate these discussions, the BoN additionally discloses the following    GDRs on London Stock Exchange
 elements of the two candidates' submissions.

 Shareholders should be aware that both candidates' proposals remain subject to

 certain conditions including confirmatory due diligence and the negotiation of
 a legally binding Investment management agreement and prior shareholders'

 approval.

 A Luxembourg-based AIFM in partnership with a global infrastructure asset
 manager intends to:

 ·   Open an office in Bucharest dedicated to the management of Fondul,
 building on its existing Central and Eastern European infrastructure presence

 ·      Focus on Fondul's existing infrastructure investments, seeking to
 maximize shareholder value by protecting and enhancing the value of Fondul's
 existing portfolio.

 ·    Should market conditions and shareholder support allow over time,
 make new investments in long-term critical infrastructure in Romania using
 listed investment vehicles (to ensure compliance with existing Romanian
 financial regulations).

 ·      Such investments could be in operational investments, or in
 support of new greenfield investment in Romanian infrastructure and would need
 to be accretive to shareholder returns relative to the implied return on
 further distributions and / or share buybacks.

 ·    Create beneficial liquidity in the portfolio through, to the extent
 possible, disposal over time of non-core assets and partnering with new
 investors either at the Fondul or asset level.

 A Luxembourg-based AIFM in partnership with a Romanian asset management
 advisory firm intends to:

 ·  Operate from its existing office in Bucharest, concentrating internal
 resources on the management of Fondul.

 ·  Implement a new strategy, over extended Fondul lifetime, focused on
 investing in listed companies within Romania and the broader CEE region,
 including transactions where Fondul can gain indirect exposure to unlisted
 companies with strong scaling prospects, using listed investment vehicles (to
 ensure compliance with existing Romanian financial regulations).

 ·    Extend Fondul's scope through a fund-of-funds strategy, investing in
 private equity and venture capital funds supported by public funding.

 ·    Anticipated commencement of new strategy from 2027 (assuming start
 of mandate in the third quarter of 2025), following interim period of
 portfolio management focused on driving growth in the estimated earnings of
 the current portfolio assets, and risk mitigation and prevention.

 ·  Introduce a flexible distribution policy balancing regular dividends
 with reinvestments in high-growth, high-yielding opportunities.

 ·   Address limited liquidity in the portfolio through liquidity management
 strategy (including partial exits, strategic IPOs of portfolio companies, and
 structured refinancing to unlock capital), new capital raise, and bond issue.

 ·     Absent necessary Romanian regulatory and/or Shareholder approvals
 for the above, Fondul's current strategy would be continued with ongoing share
 buybacks based on any exit values and a full dividend distribution policy (net
 of expenses) and portfolio value increase through developments supported via
 public grants.

 Fondul Shareholders are invited to submit their views on the new strategies by
 email to investor.relations@fondulproprietatea.ro
 (mailto:investor.relations@fondulproprietatea.ro) , until 18 April 2025,
 having as subject line "SHAREHOLDER CONSULTATION ON AIFM CANDIDACIES".

 Following the Shareholder consultation and considering feedback received, the
 BoN intends to enter a period of two-way due diligence and contractual
 negotiation with one of the candidates, and to provide investors with a
 further update.

 The Board of Nominees of FONDUL PROPRIETATEA S.A.

 Ilinca von DERENTHALL

 Chairperson

 

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