S.C. Fondul Proprietatea SA · BVB:FP
S.C. Fondul Proprietatea SA — Fondul Proprietatea — Shareholder Meeting (April 2014)
53 slides from S.C. Fondul Proprietatea SA's shareholder meeting presentation, Apr 28, 2014
Slide 1: Annual General Shareholders Meeting
Fondul Proprietatea Annual General Shareholders Meeting 28 April 2014 This material is intended solely for the recipient and should not be reproduced, copied or re-transmitted. Not intended for public use.
Slide 2: Disclaimer
DISCLAIMER 1 Disclaimer This presentation 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 matters, nor is it an offering or an invitation to buy or sell shares in Fondul Proprietatea (“the F
Slide 3: Disclaimer
DISCLAIMER 2 Disclaimer In those member states of the European Economic Area (“EEA”) which have implemented the EU Directive on Alternative Investment Fund Managers (Directive (2011/61/EU)) (“AIFMD”) and which have established transitional arrangements in relation to marketing for which the Fund qua
Slide 4: Fund Information
Fund Information FONDUL m&. FRANKLIN TEMPLETON PROPRIETATEA INVESTMENTS
Slide 5: The Fund – Key Facts
FUND INFORMATION 4 The Fund – Key Facts Fund Details as at 31 March 2014 Distributions per Share (RON) Base Currency RON 0.09000 0.08160 Fund Launch Date 28 December 2005 Franklin Templeton Appointment Date 29 September 2010 0.06000 0.05000 0.03854 0.04089 Listing Date 25 January 2011 0.03141 0.0300
Slide 6: FTIML – Key Milestones 2013
FUND INFORMATION 5 FTIML – Key Milestones 2013 Extension of the mandate Start of the second buy- RON 536.4 million dividend of FTI as Fund Manager of back programme / Spring distribution for 2012 (gross Nov Fondul Proprietatea / Mar June Approval for the third buy- Analyst and Investor Days amount)
Slide 7: Net Asset Value
FUND INFORMATION 6 Cumulative Performance 2013 13.29% Net Asset Value Cumulative Performance First Quarter 2014 -5.01% NAV (RON)/Share Dividend 0.04089 1.2432 1.2436 1.2339 1.2097 1.1585 1.1568 1.1397 1.1477 1.1782 1.1813 1.1507 1.1514 1.1601 1.1610 1.1575 1/13 2/13 3/13 4/13 5/13 6/13 7/13 8/13 9/1
Slide 8: FP Share Price Performance
FUND INFORMATION 7 FP Share Price Performance FP Share Price1 (RON) and Discount (%) OMV Petrom Placement Distribution of 75% 0.8000 Dividends (2012); Transgaz Hidroelectrica exit from sale Start of the 2nd Approval of a RON insolvency 65% buy-back program 0.05 distribution; 0.7000 Hidroelectrica re
Slide 9: Shareholders Structure
FUND INFORMATION 8 Shareholders Structure1 Evolution (% Held) Largest Shareholders2 100% 6% 2% 2% 2% 2% 2% 2% 2% 3% 4% Elliott Associates 15.22% 9% 8% 10% 8% 9% 9% 10% 10% 9% 9% 10% 9% 8% 14% 9% 9% 20% Morgan Stanley3 5.24% 27% 75% 10% 37% 9% 43% 48% 50% 52% 9% 54% 57% 58% Total Number of Shareholde
Slide 10: Portfolio Performance
Portfolio Performance FONDUL m&. FRANKLIN TEMPLETON PROPRIETATEA INVESTMENTS
Slide 11: Portfolio Structure – 31 March 2014
PORTFOLIO PERFORMANCE 10 Portfolio Structure – 31 March 2014 Net Cash & IPOs since Net Cash & Receivables, 3% the start of Receivables, Others, 2% FTIML's 3% Banks, 2% Electricity: mandate, Infrastructure, 3% Generation, 19% 15% Electricity & Gas: Transport, Unlisted, Distribution & 44% Listed, 38%
Slide 12: Largest Holdings by NAV
PORTFOLIO PERFORMANCE 11 Largest Holdings by NAV NAV % in NAV Majority as at 31 March 2014 as at No. Portfolio Company Status Shareholder % Stake1 (EUR mn) 31 March 2014 1 OMV Petrom SA Listed OMV 19.0% 1,031.1 32.2 2 Hidroelectrica SA Insolvency Romanian State 19.9% 472.5 14.8 3 Romgaz SA Listed Ro
Slide 13: SPO & IPO Transactions
PORTFOLIO PERFORMANCE 12 SPO & IPO Transactions Completed Transactions Offering Market Value Investment Company Transaction Seller Stake (EUR mn) Consortium Selected Comments BCR, Swiss Capital, Intercapital Transelectrica SPO Romanian State 15.0% 37.61 Completed in March 2012 Invest Raiffeisen, Woo
Slide 14: Government SPO & IPO Calendar for FP's Holdings
PORTFOLIO PERFORMANCE 13 Government SPO & IPO Calendar for FP’s Holdings Future IPOs and Privatizations Market Value Investment Consortium Company Official Timeline1 FP Expectations Offering Stake (EUR mn) Seller Selected Delayed by the Hidroelectrica IPO – June 2014 15.0% 355.42 New Shares Morgan S
Slide 15: Active Management – Actions to Protect and Increase Value
PORTFOLIO PERFORMANCE 14 Active Management – Actions to Protect and Increase Value of Underlying Holdings General Actions • Partnerships with the IMF/World Bank/EU Commission to highlight benefits of important themes for the Fund (e.g.: listings, secondary offerings, gas and electricity liberalizati
Slide 16: Active Management – Actions to Protect and Increase Value
PORTFOLIO PERFORMANCE 15 Active Management – Actions to Protect and Increase Value of Underlying Holdings Board Specific Actions • Initiated a number of legal cases against Board members and management of portfolio companies as well as the Romanian Government decisions with a negative impact on the
Slide 17: Active Management – Board Members (1/2)
PORTFOLIO PERFORMANCE 16 Active Management – Board Members (1/2) No. of Board No. of Directors Holdings % Stake¹ % in Total NAV¹ Members² Recommended by FP² 1 OMV Petrom SA 19 33.7 9 1 2 Hidroelectrica SA 20 14.9 7 1 3 Romgaz SA 15 13.2 7 2 4 Enel Distributie Banat SA 24 3.8 7 1 5 Enel Distributie D
Slide 18: Active Management – Board Members (2/2)
PORTFOLIO PERFORMANCE 17 Active Management – Board Members (2/2) No. of Board No. of Directors Holdings % Stake¹ % in Total NAV¹ Members² Recommended by FP² 23 Oil Terminal SA 8 0.0 7 1 24 Aeroportul International Timisoara – Traian Vuia SA 20 0.0 7 1 25 Aeroportul International M Kogalniceanu – Con
Slide 19: State Owned Companies – Key Financials
PORTFOLIO PERFORMANCE 18 State Owned Companies – Key Financials EBITDA (RON mn) Net Profit (RON mn) Company 2011 2012 2013⁵ 2011 2012 2013⁵ Hidroelectrica SA 873.6³ 707.3³ NA 6.5 (508.0) NA Romgaz SA 1,884.8 2,126.6 2,181.0 1,031.8 1,244.1 995.6 Complexul Energetic Oltenia SA1 57.8 409.8⁴ NA 179.8 1
Slide 20: Example of a Turnaround - Hidroelectrica
PORTFOLIO PERFORMANCE 19 Example of a Turnaround - Hidroelectrica Net Income vs. Foregone Profits (RON mn)1 1,590 1,060 1,573 282 680 530 815 784 719 48 292 0 -125 -508 -530 2009 2010 2011 2012 2013¹ Actual Profits Forgone Profits Actual Loss Source: Company ‘s Financial Statements. 1. 2014 Prelimin
Slide 21: Performance Drivers - Romgaz
PORTFOLIO PERFORMANCE 20 Performance Drivers - Romgaz mn RON 2010 2011 2012 20132 Operating revenues 4,124 4,552 4,358 4,846 Operating profit 996 1,265 1,432 1,399 Net income 651 1,032 1,119 996 Market Value 1st day of trading on the Market Value as at 11 April 2014 Company NAV before IPO (EUR mn) 3
Slide 22: Aligning Shareholder Interests - Transelectrica
PORTFOLIO PERFORMANCE 21 Aligning Shareholder Interests - Transelectrica mn RON 2010 2011 2012 20131 Net profit 104.0 135.5 47.9 206.4 FP Net dividend 1.2 10.9 4.0 22.1 Transelectrica Share Price (RON)1 20 Appointment of the Implementation of current Board the share options 18 members scheme 15 13 1
Slide 23: Lack of Restructuring – CE Oltenia
PORTFOLIO PERFORMANCE 22 Lack of Restructuring – CE Oltenia Financial Information RON mn 2011¹ 2012² 2013³ Operating Revenues 4,026.4 3,347.1 4,278.2 Operating Profit 347.9 44.5 Loss Net Profit 179.8 118.3 Loss Employees NA⁴ 18,761 18,850 30 November 2012 30 November 2013 31 March 2014 Portfolio Com
Slide 24: IPO candidate – Salrom
PORTFOLIO PERFORMANCE 23 IPO candidate – Salrom Financial Information Shareholder structure RON mn 2010 2011 2012 2013¹ Operating Revenues 276.2 282.7 303.5 327.2 Fondul Ministry of Operating Profit 12.2 5.2 25.3 48.2 Proprietatea Economy 49% 51% Net Profit 5.9 1.3 20.7 42.6 FP Net dividend 0.7 0.1
Slide 25: Dividend Income – Top Portfolio Companies
PORTFOLIO PERFORMANCE 24 Dividend Income – Top 20 Portfolio Companies DIVIDEND PAYOUT % FP NET DIVIDEND Top 20 Holdings1 201312 2012 2011 2014 20138 2012 2011 1 OMV Petrom SA2 36 40 47 331.4 319.0 353.1 201.6 2 Hidroelectrica SA NA — — NA — — 52.5 3 Romgaz SA 99 85 91 148.5 158.9 140.6 106.0 4 ENEL
Slide 26: New Tax on Existing Special Infrastructure Assets (1/2)
PORTFOLIO PERFORMANCE 25 New Tax on Existing Special Infrastructure Assets (1/2) According to Government Emergency Ordinance 102/2013, the Romanian Government has introduced a new tax on existing special infrastructure assets, which will apply to most of the companies in the Fund’s portfolio. Tax Le
Slide 27: New Tax on Existing Special Infrastructure Assets (2/2)
PORTFOLIO PERFORMANCE 26 New Tax on Existing Special Infrastructure Assets (2/2) Estimated impact on selected portfolio companies Company 2012 Net Profit (RON mn) Estimated Tax (RON mn) % of Net Profit OMV Petrom 3,946 265 – 330¹ 7 – 8% Nuclearelectrica 34 100 294% Hidroelectrica (508) 168 N/A Romga
Slide 28: Future Developments
Future Developments This material is intended solely for the recipient and should not be reproduced, copied or re-transmitted. Not for public use.
Slide 29: Return of Capital – RON 0.05/Share Cash Distribution
FUTURE DEVELOPMENTS 28 Return of Capital – RON 0.05/Share Cash Distribution Status • The actual payment shall start 30 days after the date on which the decrease of the share capital is effective, namely after two main legal conditions are met: ✓ Expiry of a two months term after the publication of t
Slide 30: Buy-Back Programs (1/2)
FUTURE DEVELOPMENTS 29 Buy-Back Programs (1/2) No. of shares to be Average share repurchased / Program Period Status price Broker Cancellation of shares % of the Fund’s (RON / share) issued share capital Effective as of February First May–Sep 2011 Finalized 240.3 mn / 1.74% 0.4994 Wood & Co. 2014 Aw
Slide 31: Buy-Back Programs (2/2)
FUTURE DEVELOPMENTS 30 Buy-Back Programs (2/2) Fourth Buy-Back Program • The Fund Manager has submitted for shareholders’ approval in the Annual Shareholders Meeting on 28 April 2014, the authorization for a buy-back programme to repurchase 990,855,616 shares equivalent to 7.32% of the Fund’s issued
Slide 32: Buy-Back Program – Average Daily Trading
FUTURE DEVELOPMENTS 31 Buy-Back Program – Average Daily Trading Average Daily Turnover in March 2014 (EUR mn) London GDRs BVB 2.07 1.26 0.39 0.91 0.68 0.54 0.40 0.36 0.31 0.28 0.26 FP SIF Oltenia SIF Muntenia Romgaz BRD OMV Banca SIF Transgaz SIF Banat Transilvania Transilvania Crisana Third Buy-Bac
Slide 33: Secondary Listing – Executive Summary
FUTURE DEVELOPMENTS 32 Secondary Listing – Executive Summary • Following a detailed analysis and given very supportive feedback for the secondary listing of the Fund from current and potential international institutional investors that the Fund Manager has met Context during road-shows to U.S., Cana
Slide 34: Benefits for the Fund: Access to a Broader Investor Base
FUTURE DEVELOPMENTS 33 Benefits for the Fund: Access to a Broader Investor Base • There are a large number of local institutional investors in London active in investing in closed-end funds, with dedicated assets under management of approx. USD 100 billion LSE: $18bn held by international investors
Slide 35: Benefits for the Fund and the Romanian Market
FUTURE DEVELOPMENTS 34 Benefits for the Fund and the Romanian Market • Given its size, the Fund will be the second largest fund by Net Asset Value and the fourth largest by market capitalization out of the 422 funds listed on the whole LSE Fund Market Cap (USD bn) Net Asset Value (USD bn) as at 10 A
Slide 36: Benefits for the Fund: Potential Valuation Uplift
FUTURE DEVELOPMENTS 35 Benefits for the Fund: Potential Valuation Uplift • Overall, the top 10 largest funds currently listed in London trade at an average discount of 1.2% • Given the relevant peer group of funds trading in London and the wide investor base with a deep understanding of funds as wel
Slide 37: Secondary Listing on the LSE – Plan
FUTURE DEVELOPMENTS 36 Secondary Listing on the LSE – Plan Fungible trading between London and Bucharest is expected to be achieved via the use of Depositary Interests (“DIs”) in the UK. In this regard, a UK-based registrar and depository would bridge the London and Bucharest markets by holding Shar
Slide 38: Secondary Listing on the LSE – Institutions
FUTURE DEVELOPMENTS 37 Secondary Listing on the LSE – Institutions Consortium Member Consortium Member Consortium Member SWISS CAPITAL Romanian Advisor Romanian Advisor Sole UK Financial Adviser Auditor Local PR Agency Legal Advisor International PR Agency TBC This material is intended solely for th
Slide 39: GSM Agenda
GSM Agenda This material is intended solely for the recipient and should not be reproduced, copied or re-transmitted. Not for public use.
Slide 40: EGM Agenda
GSM AGENDA 39 EGM Agenda EGM Section 1: The approval of the EGM agenda Fund Manager recommendation to vote: FOR EGM Section 2: The amendment of the Constitutive Act as follows: 2.1. The amendment of Article 19, paragraph 1 of the Constitutive Act of Fondul Proprietatea SA as follows: “Fondul Proprie
Slide 41: EGM Agenda
GSM AGENDA 40 EGM Agenda (v) to perform any other action or formality which may be necessary or desirable to ensure the full effectiveness of the actions specified in this point; such authorization of the Sole Administrator is valid until 31 December 2014 3.3. The appointment of the consortium compo
Slide 42: EGM Agenda
GSM AGENDA 41 EGM Agenda EGM Section 6: The approval of the authorization of the Sole Administrator to buy-back shares of Fondul Proprietatea S.A., for a maximum number of (i) 990,855,616 shares or (ii) 10% of the issued share capital at the relevant time, whichever is the lesser, starting with the
Slide 43: OGM Agenda
GSM AGENDA 42 OGM Agenda OGM Section 1: The approval of the OGM agenda. Fund Manager recommendation to vote: FOR OGM Section 2: The approval of the execution of the IMA between FTIML UK Bucharest Branch and Fondul Proprietatea SA as negotiated between the Board of Nominees and FTIML UK Bucharest Bra
Slide 44: OGM Agenda
GSM AGENDA 43 OGM Agenda OGM Section 4: The approval of the Annual Activity Report of the Sole Administrator of Fondul Proprietatea SA for the financial year 2013, including the financial statements for the year ended on 31 December 2013 prepared in accordance with the Romanian Accounting Regulation
Slide 45: OGM Agenda
GSM AGENDA 44 OGM Agenda OGM Section 9: The approval of 15 May 2014 as the registration date. Fund Manager recommendation to vote: FOR OGM Section 10: The empowerment, with authority to be substituted, of Grzegorz Maciej KONIECZNY, as legal representative of FTIML UK Bucharest Branch, to sign the sh
Slide 46: Income Statement
GSM AGENDA 45 Income Statement RON million 2011 Audited 2012 Audited 2013 Audited Revenues from current activity, out of which: 617.9 871.8 1,311.2 Revenues from financial assets 519.1 619.0 649.7 Interest income 41.1 34.9 36.2 Reversal of impairment adjustments & provisions 30.5 5.7 48.3 Revenues f
Slide 47: Balance Sheet
GSM AGENDA 46 Balance Sheet RON million 31 December 2011 Audited 31 December 2012 Audited 31 December 2013 Audited Intangible assets - 0.3 0.8 Financial assets 10,627.9 11,097.8 10,490.6 Non-current assets – Total 10,627.9 11,098.1 10,491.4 Current assets – Total 549.2 776.5 454.1 Prepaid expenses -
Slide 48: New Investment Management Agreement – Key terms
GSM AGENDA 47 New Investment Management Agreement – Key terms On 22 November 2013, the GSM approved the extension of the mandate with the current Fund Manager and recommended the following terms to be included in a new IMA • The mandate of the Fund Manager is of 2 years, starting with 30 September 2
Slide 49: New Investment Policy Statement – Key terms
GSM AGENDA 48 New Investment Policy Statement – Key terms Performance Objectives Discount objective • The discount between the closing price for each trading day of the shares issued by the Fund and the latest reported NAV per share should be equal to or lower than 15% in at least two thirds of the
Slide 50: Annex
Annex 1 This material is intended solely for the recipient and should not be reproduced, copied or re-transmitted. Not for public use.
Slide 51: Benefits for the Bucharest Stock Exchange (1/2)
ANNEX 1 50 Benefits for the Bucharest Stock Exchange (1/2) • The Bucharest Stock Exchange will remain the primary listing venue for the Fund • The Fund’s shareholders register will remain with the Romanian Central Depositary • All largest companies in Central Europe, including Poland, Hungary, and C
Slide 52: Benefits for the Bucharest Stock Exchange (2/2)
ANNEX 1 51 Benefits for the Bucharest Stock Exchange (2/2) • The IPO of Romgaz in Bucharest and London highlights the additional benefits of a London listing alongside Bucharest • The example of Romgaz underlines that liquidity tends to migrate to the home market (10-15% of the GDRs have been conver
Slide 53: Fondul Proprietatea contact details
Fondul Proprietatea Franklin Templeton Investment Management UK Bucharest Branch Premium Point Buzesti Street 78-80, 7th-8th floor 1st District 011017 Bucharest Romania 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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