Eurasian mystery solved – and another warning about foreign shares #DPEU

Eurasian mystery solved – and another warning about foreign shares #DPEU

In my recent article regarding DP Eurasia, I noted this unusual footnote to the company’s preliminary results, released on April 4th:

DP Eurasia shareholder Fides Food Coop. sold 14,357,241 shares with the Unit Price GBP 1.05 as of 1 February 2019.

What’s strange is that there was no RNS on February 1st, or indeed on any other date, about this share disposal by the company’s largest shareholder. Usually, when 10% of a company’s shares changes hands, there is a timely RNS to let investors know!

Fides Food Coop’s (FFC) share disposal has been disclosed again in Note 24 of the company’s annual results.

FFC is a subsidiary of Turkish Private Equity Fund II L.P, a fund launched by a group called Turkven in 2007. As the cornerstone investor, FFC enjoys a special relationship with DP Eurasia, including the right to board representation for as long it retains at least a 10% shareholding.

Anyway, I’m pleased to be able to report that the mystery about the missing RNS has been solved. The company’s advisers have informed me that the share disposal was not announced on the London Stock Exchange, as it was only required to make an announcement to the Authority for the Financial Markets (AFM) in the Netherlands, where DP Eurasia is incorporated.

After a little bit of digging in the AFM archives, I have managed to find the relevant announcement.

The AFM website, in combination with the annual report published today, also helps us to understand who’s been picking up the slack on the shareholder register. There are three new institutions with disclosable positions, and Wellington has increased its position by almost 1 million shares.

The new institutional holders are:

These are reputable fund managers and their presence reflects well on DP Eurasia, in my view. Of course it’s not ideal to see selling pressure from the cornerstone investor, who knows the company inside and out, but it is pretty standard when private equity brings a fresh company to market.

I very much hope that in future the company will make these announcements not just to the AFM, but also on the London Stock Exchange through the RNS system. It doesn’t seem too much to ask, that a London-listed company would announce major share transactions through the RNS system.

Until then, those of us holding DPEU will have to keep an eye on the AFM website! It’s a reminder, as if we needed one, that investing in foreign companies brings with it all sorts of complications and surprises.

DP Eurasia remains the smallest position in my portfolio, but I’d love to see it succeed.

 

At the time of publication, the author has a long position in DPEU.

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    I noticed the announcement on Stockopedia funnily enough. It was put out via Reuters on the day of the placing.

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