Romania's Pre-'89 Receivables Moved To Budget To Hasten FP Listing

The sums recovered from receivables accumulated by Romania before 1989 in foreign trade activities will be transferred to the state budget, instead of Fondul Proprietatea’s share capital, according to a draft Emergency Ordinance posted on the Finance Ministry’s website.

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Thus, the document plans to amend current legal provisions, which state the money collected from said receivables are to be transferred to the share capital of Fondul Proprietatea, or FP, since the latter variant would delay the floating of FP shares on the Bucharest Stock Exchange.

Through this measure, the Finance Ministry expects to boost budget revenues by 44.6 million lei (EUR1=RON4.2668) this year, by RON169.7 million in 2011 and by RON230.9 million in 2012.

According to current legislation, any transfer made by the state to FP is considered to target the extinguishing of debt contracted on shares subscribed and unpaid. Following the repayment of said debt, new transfers would be considered share capital increases.

The Ministry notes that, once the subscribed and unpaid stock issue is resolved, by cancelling 482.94 million shares left unpaid for, and given that new transfers would result in the delay of floating, the legal amendments proposed are required.

Fondul Proprietatea's shareholders recently approved the appointment of Franklin Templeton as the fund's administrator. The shareholders also approved listing the fund's shares on the Bucharest bourse and on other international markets.

Fondul Proprietatea was set up in 2005 to compensate Romanians whose properties were confiscated during communism.

According to Franklin Templeton officials, the $4 billion fund may be listed in Bucharest early next year. A consortium made of Raiffeisen Capital&Investment, ING Bank and BRD Groupe Societe Generale will broker the operation.

Romanian Finance Ministry holds 52.84% of the fund's shares, while the remainder is distributed among private stockholders. The fund owns shares in 99 companies, including Transgaz, Transelectrica, Alro, Romgaz and several power distributors.

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