The biggest investment fund in Romania, Fondul Proprietatea, warns in a public statement that the management of the Bucharest Airports National Company (CNAB) might dilute its stake from 20% to 0.7% through the capitalisation of an overvalued plot of land used by its secondary airport Baneasa.

The management might shortly call a General Shareholders Meeting to approve a share capital increase based on an excessive and disputed value of RON 3.8 bln for the land inside the Baneasa airport, brought as a contribution in kind to the company's capital, Fondul Proprietatea explains.

This is the third time the process to increase the share capital was initiated since 2001, when Baneasa Airport received the land ownership certificates.

Based on this latest disputed valuation, Fondul Proprietatea might be required to make a contribution of RON 953.7 million in a potential share capital increase, failing which its 20% participation would be diluted to 0.7%, an equivalent of RON 570 million in value destruction for FP shareholders and the Romanian capital market.

Johan Meyer, CEO of Franklin Templeton Bucharest and Portfolio Manager of Fondul Proprietatea, objects to the land valuation and warns that such actions are destroying the value of CNAB.

"It's these types of actions that create severely negative perceptions among existing and potential investors and should be avoided at all costs," he explains.

Fondul Proprietatea strongly disputes the fundamentally flawed land valuation report, carried out in 2021, which attributes the value of RON 3.8 bln to the land, despite a previously approved valuation report from 2017, which had set the value of the same land at RON 336 mln.

(Photo: Francesco Scatena | Dreamstime.com)

andrei@romania-insider.com