Fondul Proprietatea announced competion of the 6the buyback in which the fund has repurchased 731.9 million shares. The share will be cancelled at the next shareholder meeting. Yesterday Fondul announced commencement of the 7th round of buyback in which it will repurchase 409.6 million of shares. The fund is authorised to purchase up to 25% of the daily volumes.
Fondul Proprietatea announced the completion of the 6the buyback in which the Fund has repurchased 731.9 million shares. The share will be cancelled at the next shareholder meeting. Yesterday Fondul announced the commencement of the 7th round of buyback in which it will repurchase 409.6 million of shares. At current market price, the buyback amounts to USD 80 million, which represents 4% of its market capitalisation. The fund is authorised to purchase up to 25% of the daily volumes.
Fondul shares currently trade at 31% discount to its NAV. If the shares were repurchased at the current prices, the NAV would increase by USD 35 mln, which is approximately 1.8% of the NAV.
Fondul is working on the listing of its largest asset Hidroelectrica on the local stock exchange which should be completed by the end of 2016. Hidroelectrica is Fondul largest holding at 27% of NAV. The illiquidity of this holding represents on of the main reasons for the NAV discount.
Net dividend yield of 6.25%
The Fund management proposed that the Fund for 2016 will distribute 0.05 RON per share. The payment will take the form of reduction of share nominal by that amount. In most jurisdictions, such capital return is tax-free. Fund shareholders will, therefore, be able to collect net ”dividend” yield of 6.25%.
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