ZAT sell-off fails to achieve its full potential

19 June 2008 16:08  [Source: ICIS news]

PRAGUE (ICIS news)--Lack of interest meant the recent initial public offering (IPO) of Polish state-owned nitrogen fertilizer producer Zaklady Azotowe Tarnow (ZAT) was undersold, investment bank Wood & Company said on Thursday.

 

ZAT, also a producer of caprolactam and plastics, offered 16m shares on the Warsaw Stock Exchange but only 15.1 million were sold.

 

ZAT had raised zlotys (Zl) 295m (€87.6m, $135.7m) from the IPO versus the planned Zl307m or more, Wood & Company analyst Barbara Zaleska said.

 

“Although the company initially wanted to distribute 75% of the shares among financial institutions, there was insufficient interest and the issue ended up with large industry investors, which were tempted by the prospect of acquiring bigger stakes next year when the privatisation of ZAT continues,” she added.

 

Four million shares, or a 10.2% stake, were acquired by Polish state-owned natural gas monopoly PGNiG, while 2.5m shares, or a 6.5% stake, were picked up by largest Polish base chemicals producer Ciech.

 

The ZAT IPO was the first privatisation move implemented in any sector in the country since 2006.

 

The new Polish government recently revived the nation’s privatisation programme, with commitments including a pledge to privatise the holdings in all 19 chemical companies still under state control by 2011.

 

However, following the ZAT disappointment analysts had begun speculating whether or not some of the sell-offs might be postponed.

 

Polish business daily Parkiet suggested one such delay could hit the IPO of nitrogen fertilizer producer Zaklady Azotowe Kedzierzyn, which was scheduled to float shares later this year.

 

($1 = €0.64, $1 = Zl2.17)

By: Will Conroy
+44 20 8652 3214

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