S.C. Fondul Proprietatea SA · BVB:FP
S.C. Fondul Proprietatea SA — Fondul Proprietatea — Shareholder Meeting (October 2016)
52 slides from S.C. Fondul Proprietatea SA's shareholder meeting presentation, Oct 31, 2016
Slide 1: Fondul Proprietatea General Shareholders Meeting
31 October 2016 Fondul Proprietatea General Shareholders Meeting This material is intended solely for the recipient and should not be reproduced, copied or re-transmitted. Not for public use.
Slide 2: Disclaimer
Disclaimer This presentation is made solely to the intended recipient and should not be distributed to, or acted upon by, any other person. It is for general information only and reflects the personal views of the presenter. Nothing herein is intended to constitute advice on investment, legal or tax
Slide 3: Performance Report - Highlights
Performance Report - Highlights This material is intended solely for the recipient and should not be reproduced, copied or re-transmitted. Not for public use.
Slide 4: Fondul Proprietatea Structure – since 1 April 2016
FONDUL PROPRIETATEA 3 Fondul Proprietatea Structure – since 1 April 2016 Fondul Proprietatea Board of Nominees 1) Alternative Investment Fund Manager 2) Sole Director FTIS Retains responsibility for Risk Management 1) Portfolio Management (AIFMD delegation) FTIML Bucharest 2) Administrative Services
Slide 5: FTIS S.à r.l. – Management Company
Primary Roles and Responsibilities of FTIS S.à r.l. – Management Company Responsibilities of the AIFM: • Risk Management • Investment Management (Oversight of delegated portfolio management to FTIML Branch) • Valuation • Due Diligence on the Depositary (BRD Groupe Societe Generale) • Reporting oblig
Slide 6: AIFMD
AIFMD • FTIS Sarl’s primary responsibility is to monitor and highlight any material issues in respect of the risk management of Fondul Proprietatea, the oversight of portfolio management delegated to Franklin Templeton Investment Management Limited, new regulatory developments and any other matter w
Slide 7: Report on the Discount Objective
Report on the Discount Objective This material is intended solely for the recipient and should not be reproduced, copied or re-transmitted. Not for public use.
Slide 8: Discount Objective
Discount Objective • Objective – The discount between closing price and last reported NAV per share to be equal to or lower than 15%, in at least 2/3 of the trading days in the period 1 July 2015 – 30 June 2016 • Monthly Monitoring – 30 June 2016 – In the period 1 July 2015 – 30 June 2016, discount
Slide 9: Discount Objective – Evolution During the Reporting Period
FUND INFORMATION Discount Objective – Evolution During the Reporting Period 0.7550 40% 0.6700 35% 0.5850 30% 0.5000 25% 7/15 7/15 8/15 9/15 10/15 11/15 11/15 12/15 1/16 2/16 3/16 4/16 4/16 5/16 6/16 Discount Share Price RON Source: BVB, for the period 1 July 2015 – 30 June 2016. This material is int
Slide 10: Discount Objective – Measures Taken
Discount Objective – Measures Taken • Distributed RON 797.0 million to the Fund’s shareholders during 1 July 2015 – 30 June 2016 via: – Execution of the 5th and 6th buy-back programs to acquire approx. 10% of the outstanding shares, through daily share repurchases of up to 25% of the average daily t
Slide 11: Discount Objective – Creating Liquidity at the Portfolio Level
Discount Objective – Creating Liquidity at the Portfolio Level during the Reporting Period1 Amount RON Total Proceeds Collected on Disposals 1,624,115,940 Dividends Received (Collected) 441,607,778 Credit Facility (Committed and Uncommitted) 500,000,000 Total 2,565,723,718 Source: Fund Manager. 1. F
Slide 12: Discount Objective – Distributions to Shareholders
Discount Objective – Distributions to Shareholders 1 July 2015 – 30 June 2016 Distributions to shareholders in the Expenses related to % of the average period 1 July 2015 - distributions recorded % from the NAV as RON Total share price during the 30 June 2016 in the period 1 July at 30 June 2015 per
Slide 13: Discount Objective – Secondary Listing on the London Stock Exchange
Discount Objective – Secondary Listing on the London Stock Exchange • The GDR facility of 1/3 of the outstanding shares reached capacity in a relatively short period of time (less than 9 months) • Large long-only mutual funds, endowments, closed end fund specialist investors, as well as hedge funds
Slide 14: Discount Objective - Fondul Proprietatea GDR Premium to the Local Shares
APPENDIX I 13 Discount Objective - Fondul Proprietatea GDR Premium to the Local Shares USD • 3.5% Premium as at 30 June 2016 105 95 85 75 4/15 6/15 7/15 8/15 10/15 11/15 12/15 2/16 3/16 4/16 6/16 FP GDR FP Share Source: Bloomberg, for the period 29 April 2015 – 30 June 2016. This material is intende
Slide 15: Report on the NAV Objective
Report on the NAV Objective This material is intended solely for the recipient and should not be reproduced, copied or re-transmitted. Not for public use.
Slide 16: NAV Objective
NAV Objective • Objective – The Adjusted NAV per share as at 30 June 2016, to be higher than the NAV per share as at 30 June 2015 (RON 1.1851 per share) • Monthly Monitoring – 30 June 2016 – Adjusted NAV as at 30 June 2016 is higher than the NAV per share as at 30 June 2015 NAV Objective Amount RON
Slide 17: Attribution to NAV Performance for the Reporting Period
Attribution to NAV Performance for the Reporting Period (30 June 2015 – 30 June 2016)1 TOP PERFORMERS Change in share price or NAV Total effect for the Weight in Company Status value per share for the period period 30.6.2015 – total NAV2 30.6.2015 – 30.6.2016 30.6.2016 Hidroelectrica S.A. Unlisted 2
Slide 18: Report on the Obligations regarding the Discount Control Mechanism
Report on the Obligations regarding the Discount Control Mechanism This material is intended solely for the recipient and should not be reproduced, copied or re-transmitted. Not for public use.
Slide 19: DCM Provisions
DCM Provisions • According to Article 9 of the Management Agreement under AIFMD, as approved by the Fund’s Shareholders on 29 October 2015, which commenced on 1 April 2016: “FUND MANAGER PERFORMANCE OBJECTIVES. ANNUAL REPORTING 9.1. For the duration of this Management Agreement, the Fund Manager mus
Slide 20: Discount Control during Q2 of 2016
Discount Control during Q2 of 2016 (the new IMA into force) • If the discount stays above 15% for more than half of the trading days in Q2 2016, the Fund Manager will call a Board meeting to discuss the DCM • The Board meeting took place on 7 June 2016 • First calculation period based on the new IMA
Slide 21: Ongoing DCM Measures (I)
Ongoing DCM Measures (I): • Cash Distributions: the Fund Manager proposed and shareholders approved the cash distribution for 2016 (to shareholders registered as at 6 June 2016 of RON 0.05/share, proportionally with their participation to the paid-up share capital of Fondul Proprietatea SA; payment
Slide 22: Ongoing DCM Measures (II)
Ongoing DCM Measures (II): • Credit facility: starting with July 2016, there is a new credit facility of RON 1 billion from BRD – Groupe Societe Generale • Investor Relations Activities: – In April, we organized the 3rd Romania Investor Day event in New York, where 41 investment professionals partic
Slide 23: Fund Information
Fund Information This material is intended solely for the recipient and should not be reproduced, copied or re-transmitted. Not for public use.
Slide 24: The Fund – Key Facts
The Fund – Key Facts Fund Details as at 30 September 20161 RON USD NAV 11.36 bn 2.85 bn2 NAV/Share 1.1698 0.29382 Price/Share 0.8030 0.20162 Price/GDR 41.41 10.402 Market Capitalization as at 28 October 20163 7.80 bn 1.89 bn Discount per Share as at 28 October 2016 31.18% Discount per GDR as at 28 O
Slide 25: FP Market Valuation
FUND INFORMATION 24 FP Market Valuation NAV vs. Market Capitalization (USD bn)1 2.85 Unlisted 1.85 Net Cash and 0.18 1.89 Receivables 0.82 Listed NAV Market Capitalization2 30 September 2016 28 October 2016 BVB LSE Discount3 31.18% 28.09% Average Daily Turnover (USD) 1.74 mn4 1.02 mn5 1. Source: BVB
Slide 26: FP Performance
FUND INFORMATION 25 FP Performance FP Share Price1 (RON) and Discount (%) 0.8500 66% 0.6500 49% 0.4500 32% 0.2500 15% 1/11 7/11 1/12 7/12 1/13 7/13 1/14 7/14 1/15 7/15 1/16 7/16 Discount Share Price RON 1. Source: BVB, Bloomberg, for the period 25 January 2011 – 28 October 2016. This material is int
Slide 27: Portfolio
Portfolio This material is intended solely for the recipient and should not be reproduced, copied or re-transmitted. Not for public use.
Slide 28: Portfolio Structure
FONDUL PROPRIETATEA 27 Portfolio Structure Listed vs Unlisted By Sector By Controlling Ownership as as at 30 September 2016 as at 30 September 2016 at 30 June 2016 2% Electricity & Gas: 3% 8% Distribution & Supply 11% Unlisted Electricity: Generation State 6% 6% 26% Controlled Oil & Gas Entities Lis
Slide 29: Largest Holdings by NAV
Largest Holdings by NAV NAV % in NAV Majority 1 as at 30 as at Portfolio Company Status % Stake September 2016 30 September Shareholder (USD mn) 2016 Hidroelectrica SA Unlisted Romanian State 19.9% 820.90 28.78 OMV Petrom SA Listed OMV 19.0% 659.21 23.11 CN Aeroporturi Bucuresti Unlisted Romanian St
Slide 30: Hidroelectrica – Financial Performance
FONDUL PROPRIETATEA 29 Hidroelectrica – Financial Performance Pre-tax cumulated profit (RON mn) • On 21 June 2016 the company exited the insolvency procedure by the decision of the syndic judge. 1,132 1,158 1,110 • The company is run by an interim Supervisory Board composed of 7 members, and an inte
Slide 31: OMV Petrom – Partial Sale
OMV Petrom – Partial Sale Secondary public offering of both shares and global depositary receipts representing interests in Transaction type the existing shares of the Company ("GDRs") BVB for the ordinary shares Listing venues LSE for GDRs Up to 3,641,100,108 Shares representing 6.43% of the share
Slide 32: OMV Petrom Partial Sale – Rationale
OMV Petrom Partial Sale – Rationale • Large exposure to OMV Petrom (23% of NAV, as at 30 September 2016) • Low market liquidity of OMV Petrom shares on the BVB • Cash requirements driven by the IPS • Earlier announcement regarding potential decrease of FP’ holding in OMV Petrom below 15% • Supportiv
Slide 33: OMV Petrom – Share Price Performance
APPENDIX I 32 OMV Petrom – Share Price Performance USD 100 80 60 40 20 6/14 7/14 9/14 10/14 12/14 2/15 3/15 5/15 7/15 8/15 10/15 12/15 1/16 3/16 5/16 6/16 8/16 9/16 OMV Petrom Brent Oil Emerging Markets Oil and Gas Index MOL OMV Source: Bloomberg, as at 30 September 2016. This material is intended s
Slide 34: FP Share Price Evolution vs. OMV Petrom and Romgaz
APPENDIX I 33 FP Share Price Evolution vs. OMV Petrom and Romgaz USD 190 160 130 100 70 1/11 5/11 9/11 1/12 5/12 9/12 1/13 5/13 9/13 1/14 5/14 9/14 1/15 5/15 9/15 1/16 5/16 9/16 FP OMV Petrom Romgaz Source: Bloomberg, as at 30 September 2016. This material is intended solely for the recipient and sh
Slide 35: OMV Petrom – Very Low Liquidity vs. Market Capitalisation
OMV Petrom – Very Low Liquidity vs. Market Capitalisation mn EUR 18.21% 15.52% 12.85% 4.84% 7.93% 1.57% 8.20% 3,104 1,937 2,013 1,751 1,722 809 482 319 301 259 83 64 49 40 FP Banca Romgaz BRD GSG Transgaz OMV Petrom Transelectrica Transilvania Total trading volume YTD 30 Sept 16 Market Capitalisatio
Slide 36: OMV Petrom Partial Sale – Transaction Details (I)
35 OMV Petrom Partial Sale – Transaction Details (I) Type of Pricing / Pricing Offering Size Offering Structure Offering Settlement • RON 0.21 per • RON 682 mn and $19 mn • 3,267,250,908 shares and • SPO of share / $7.70 per • 14 Oct / 19 • 3,641,100,108 shares 2,492,328 GDRs shares and GDR Oct for
Slide 37: OMV Petrom Partial Sale – Transaction Details (II)
36 OMV Petrom Partial Sale – Transaction Details (II) Total Allocation by Region Total Allocation by Type 1% Domestic Long Only/Pension Funds 22% 14% 35% Hedge Funds CEE Private Banks / 43% International 85% Other Transaction Highlights • Higher aftermarket liquidity • Broadened shareholder base (80
Slide 38: Corporate Actions
Corporate Actions This material is intended solely for the recipient and should not be reproduced, copied or re-transmitted. Not for public use.
Slide 39: Annual Decrease in Total Assets: 4.7%
Annual Decrease in Total Assets: 4.7%. 38 Total Distributions Account for almost 50% of December 2010 NAV +4.2% mn RON Average Annual increase in total assets including cash distributions -4.7% Average Annual decrease in total assets excluding cash distributions 7,517 15,328 14,465 14,979 15,014 13,
Slide 40: Positive Evolution of the NAV/Share including Cash Distributions: +62.1%
CORPORATE ACTIONS 39 Positive Evolution of the NAV/Share including Cash Distributions: +62.1% +11.3% RON Average Annual increase of NAV/share including cash distributions +0.9% Average Annual increase of NAV/share 0.6334 excluding cash distributions 1.2436 1.2125 1.1564 1.1698 1.1124 1.0788 1.1371 D
Slide 41: Shareholder Returns
CORPORATE ACTIONS 40 Shareholder Returns RON 1.1974 0.3924 +199.4% +134.6% +57.7% +27.6% 0.8050 0.5105 0.4000 Average Price Before BVB listing¹ Average Price in 2011 Current Share Price² Share price Total Gross Cash Distribution Source: BVB. 1. Source: Intercapital Invest January 2011 report, and pr
Slide 42: NAV, Share Price and GDR Performance
NAV, Share Price and GDR Performance Cumulative Performance (RON) Since Performance 2011 2012 2013 2014 2015 H1 2016 YTD1 Inception1 NAV (0.47)% 8.91% 13.29% 1.39% (0.60)% 3.53% 5.82% 30.97% Ordinary Share (30.32)% 38.30% 61.34% 14.53% (4.06)% (4.21)% 5.95% 81.02% Price GDR N/A N/A N/A N/A N/A (3.05
Slide 43: Distributions to Shareholders
Distributions to Shareholders Cash Distributions to Shareholders (RON) Gross Cash Net Cash Net Cash Distribution Financial % Change Paid In Distribution Distribution Per Share if the Fund Year Year on Year Per Share Per Share1 were to pay Dividends 2008-2009 Dividend 2010 0.08160 0.06854 - 0.06854 (
Slide 44: Updated Annual Cash Distribution Policy
FUND INFORMATION 43 Updated Annual Cash Distribution Policy • In the absence of exceptional market conditions or circumstances, and subject to any restrictions under Romanian legal or tax regulations and subject to available funding, the Investment Manager intends to recommend a cash distribution re
Slide 45: Special Cash Distribution
FUND INFORMATION 44 Special Cash Distribution • In accordance with the Investment Policy Statement, the Investment Manager submitted for shareholders’ approval during the GSM to be held on 31 October 2016, the approval of a special distribution of RON 0.05 per share, in addition to the annual cash d
Slide 46: Nominal Share Value vs. Share Price (I)
Nominal Share Value vs. Share Price (I) RON 307.00 29.25 13.54 10.90 10.00 10.00 10.00 1.00 2.43 0.10 0.23 0.85 0.81 1.00 OMV Petrom FP BRD Banca Electrica Transelectrica Transgaz Transilvania Nominal share value Share price Source: BVB. As at 14 October 2016. This material is intended solely for th
Slide 47: Nominal Share Value vs. Share Price (II)
Nominal Share Value vs. Share Price (II) USD 127.88 117.63 84.78 67.45 6.30 0.21 0.20 0.01 1.10 3.95 0.01 0.01 FP Apple Facebook BMW Chrysler Fiat JW Marriott Nominal share value Share price Source: Bloomberg, Nasdaq, SEC, Trading Economics, as at 14 October 2016. This material is intended solely fo
Slide 48: Simulation: Dividend Distribution vs Return of Capital Distribution
Simulation: Dividend Distribution vs Return of Capital Distribution • This is a simulation, and not the Investment Manager proposal, realized in order to show the impact on total equity of distributions through Dividend, or Return on capital • Assumption for distributions: RON 0.05 / share • Total s
Slide 49: Buy – Back Programs
Buy – Back Programs No. of shares to Average be repurchased / Program Period Status share price Broker Cancellation of shares % of the Fund’s (RON/share) issued share capital Approval on 26 April 2016 of the cancellation of 179.6 mn shares; Wood & Co., Sep 2015 – Shareholders approved the Sixth Fina
Slide 50: 31 October EGM Agenda
FUND INFORMATION 49 31 October EGM Agenda • The approval of the decrease of the subscribed share capital of Fondul Proprietatea S.A. from RON 8,562,968,634.10 to RON 5,742,226,025.22 through the reduction of the par value of the shares of Fondul Proprietatea S.A. from RON 0.85 to RON 0.57, following
Slide 51: 31 October OGM Agenda
FUND INFORMATION 50 31 October OGM Agenda • The Alternative Investment Fund Manager’s presentation of the Performance Report for the period 1 July 2015 – 30 June 2016. • Board of Nominees’ presentation of the Review Report in relation to the Performance Report prepared by the Alternative Investment
Slide 52: Fondul Proprietatea contact details
Fondul Proprietatea Premium Point Buzesti Street 78-80, 1st District Bucharest 011017 www.fondulproprietatea.ro This material is intended solely for the recipient and should not be reproduced, copied or re-transmitted. Not for public use.
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