Poland’s ambitious privatization programme shows no sign of being derailed by the European debt crisis and global equity market woes, with recent share sales continuing to attract overwhelming demand.
In late June, for example, the authorities in Warsaw sold Zl4.21 billion ($1.28 billion) of shares in Tauron Polska Energia, the country’s second biggest power utility. The treasury ministry offloaded a 52% stake in an IPO for Zl0.57 a share – towards the bottom end of the Zl0.55 to Zl0.70 marketing range. Despite the conservative pricing by global coordinators UBS and UniCredit, the issue was seen as a success, given that most companies worldwide have been forced to pull recent stock offerings.
Importantly, the proceeds from Tauron’s IPO brought the government almost halfway to its goal of $10 billion equivalent of privatization sales this year, money that is needed to fund the country’s budget deficit. Poland has sold stakes in copper group KGHM Polska Miedz, oil refiner Grupa Lotos and power utility Enea in the first six months of this year.
Landmark sale
In May the Polish government completed the landmark IPO of Poland’s largest insurer, Powszechny Zaklad Ubezpieczen (PZU). This attracted overwhelming demand and provided further proof that Poland remains the hotspot for equity new-issue activity in CEE.