Fondul Proprietatea - The Government changed the privatization strategy for Posta Romana
According to a Government decision, the State changed its privatization strategy for Posta Romana. Thus, the State intends now to sell the majority stake of 51% of the postal operator to a strategic investor through a share capital increase. Fondul Proprietatea (FP), who owns 25% of the share capital, will have preemptive rights. No deadline for this privatization was provided. We remind that initially, the State intended to sell a stake of some 20% to a strategic investor through a share capital increase. According to the Letter of Intent with the IMF, the privatization was intended to be concluded until the end of 2012.
Fondul Proprietatea - Official NAV as of November 2012
Fondul Proprietatea’s (FP) official NAV as of end of November decreased 0.9% mom, due to a contraction in listed shares portfolio, with the per share value standing at RON 0.9516. Thus, listed shares portfolio came in at RON 5.69 bn, down 2% mom while the unlisted section was RON 6.32 bn, flat on previous months. Net cash position decreased 0.3% mom to RON 756 mn. Total NAV as of November was RON 12.76 bn, below the value of its share capital which stood at RON 13.78 bn. The Court ruled to suspend the Government decision to list Hidroelectrica as requested by the employees union. According the media a Bucharest Court ruled in favour of Hidroelectrica's employees union by suspending the Government decision to list the power generator on the Stock Exchange. The Court’s decision is based on formal grounds, apparently a lack of all necessary approvals. The decision could be appealed.
Moreover, the union has also won the right to contest at the Constitutional Court the legally of the Government Ordinance which stipulates the private management. The employees intend to suspend the appointment of a private management at Hidroelectrica. Despite the fact that the listing is not an issue for at least one year, given the insolvency, we view these Court decisions as negative for Fondul Proprietatea since it shows the strong resistance to changes.
SIFs - Securities Commission to have the final say on suspending voting rights
Romanian Securities Commission (CNVM) has issued a regulation which stipulates that SIFs' management would inform it whenever decide to suspend the voting rights for concerted ownership above the 5% threshold, but CNVM would have to confirm the suspensions. This actually gives CNVM the final say on deciding which voting rights are suspended. We view this piece of news as positive for SIFs shares since it theoretically removes the possibility that SIFs? management suspends arbitrarily the voting rights for active shareholders.
Transelectrica revised 2012 budget
Transeletrica called a GSM for December 27 to approve among other the revised 2012 budget. The revised net profit is foreseen at RON 31.2 mn, down 22% compared with the existing approved budget. Revenues from power transmission are expected some 1% lower yoy, while the previous budget foresaw a rise of 1.8% yoy in quantities. The company also expects higher financial expenses triggered by RON depreciation and a reduction of third parties expenses (which includes mainly maintenance and repairs expenses). We see the news as neutral as the revised figures are close to our estimates and as the results reported for 1-3Q 2012, which showed a net profit of RON 19.2 mn, already pointed to weaker performance. 2012 dividends should be paid from the net profit under IFRS, which would be boosted by the works commissioned and financed by the fee for connection to the grid. We expect however Transelectrica to try to circumvent this rule as the profit mentioned is non-cash.
Dafora to begin drilling works in Israel estimated at USD 12 mn
Oil&gas drilling company Dafora (DAFR) announced it signed a contract with Globe Exploration for drilling works in Israel. The works are expected to spread over two years with the possibility for extension for an additional two years. The estimated value of the works stands at USD 12 mn.
Artego - 2012 DPS estimated at RON 0.5
According to a release to the local stock exchange, Artego (ARTE), a producer of industrial rubber products, announced that the 2012 DPS should stand at around RON 0.5, based on the estimated 2012 results. According to the last closing price, the dividend yield stands at 5.7%.