Shareholders in the Property Fund (FP) approved last week the secondary listing of the closed-end fund on the Warsaw Stock Exchange (WSE), hoping to bolster demand for shares, which will be available to a larger pool of international investors. The listing had already been approved in principle this April.
Initially there will be a technical listing without shares being sold, based on a listing memorandum that doesn’t require the approval of regulatory bodies. Greg Konieczny, fund manager at FP, said that the memorandum would be drawn up in 10 weeks, while it will take another two to three weeks to obtain additional approvals.
However, this could be delayed if the depositary link between Romania and Poland is not established.
“Up to now, we have been able to attract more than EUR 600 million of fresh investments in the Romanian market, a situation that hasn’t happened in years. We plan to continue to do this but we need some support from local authorities. We can’t say everything is great and when investors come and hear about the issue with the link, they say: ‘If they don’t want you, why should we invest in the fund?’” said Konieczny.
Once listed on the WSE, the FP will look to increase liquidity by attracting international investors and facilitating accelerated book-building placements or individual trades on the WSE.
The FP will be advised on this transaction by a consortium comprising JP Morgan, the investment bank, and UniCredit Group as global coordinators, and KBC Securities, the brokerage, as co-manager.
Deloitte has been selected as auditor, while law firms Weil and PeliFilip will act as the banks’ international and domestic counselors. The issuer’s international and domestic counsel is currently going through the tender procedure.
The secondary listing has estimated costs of RON 10.7 million (EUR 2.4 million).The fund has capped the consortium’s fees and expenses at EUR 1 million, while around EUR 500,000 will go to the law firms.
The FP had a market capitalization of EUR 1.52 billion in May, with an average daily turnover of EUR 4.45 million. Its largest shareholders are US hedge fund Elliott Associates with a 13.9 percent stake and British investment management firm City of London, which holds 7.2 percent of the shares.