Until it gets to compensate expropriated persons, FondulProprietatea (Property Fund-FP) will carry out an extensive ownshare buyback operation. The repurchase is likely to bring gains ofas much as 1,400% to speculators who have taken advantage of the sofar confused situation. While it was set up to compensate thevictims of the communist regime whose properties were confiscated,FP now proves to be a lucrative business particularly for thosewho've profited from the numberless delayed listing operations andbought shares at prices of as much as 10% of face value. In H1, theRomanian state paid 10m euros in the account of compensationsordered by the European Court of Human Rights, with mostlitigations concerning property right violation, with the Courtconsidering FP is not functional though it was set up as early as2005. Now, the fund wants to repurchase a stake of 1.37 billionshares at the highest, accounting for 10% in the share capital, forwhich it is willing to pay as much as 2bn RON (around 500m euros).Formally, the move is meant to boost the price of shares when theFund is listed on the BSE. On September 6, FP shareholders willvote on the proposal coming from Franklin Templeton management firmfor the Fund to repurchase the respective stake during September 1,2010-March 1, 2012 period. The Romanian state controls over 50% inthe Fund, with the rest divided between 4,000 private shareholders.Franklin Templeton will decide whether the Fund is to launch thebuyback offer ahead or after Bourse floatation.
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