Poland agency halts privatisation of chemical firms ZAT, ZAK

13 May 2010 18:12  [Source: ICIS news]

PRAGUE (ICIS news)--Poland has halted the privatisation of state chemical firms Zaklady Azotowe Tarnow (ZAT) and Zaklady Azotowe Kedzierzyn (ZAK), the country’s industry restructuring agency said on Thursday.

The decision was made after a binding bid for controlling stakes in the firms submitted by Germany-based Petro Carbo Chem (PCC) proved unsatisfactory, Nafta Polska said.

“Other [preliminary] offers made in the course of the privatisation process last December do not give rise to the expectation that satisfactory offers would be received should negotiations be resumed with any of the other shortlisted bidders,” Nafta Polska added in a statement.

The agency said it would examine the possibility of restarting the privatisation of ZAT and ZAK, as well as of Poland’s largest Polish chemical maker, Ciech – which earlier this year dropped out of Poland’s first group of chemical companies to be privatised in an effort to resolve debt restructuring issues – in the second half of 2010.

The issue would be reviewed after feedback was received from the outcome of the privatisation of the second group of Poland's state-owned chemical companies – leading fertilizer makers Zaklady Azotowe Pulawy (ZAP) and Zaklady Chemiczne Police (ZChP) – which was set to begin on 14 May, it noted.

Sources at PCC said the treasury ministry had never really been realistic as to what prices and capital commitments it could fetch for the companies in the current economic climate.

They pointed out that as far back as last December, PCC board chairman Waldemar Preussner was quoted as saying: “It seems there will be discrepancies between what the treasury ministry expects [from bidders] and reality.”

The treasury acknowledged that the economic downturn, as well as the high prices of feedstock gas that Polish chemical companies have to pay to the state gas monopoly, were taking a toll on the value of the companies.

However, the treasury said, it hoped there would be big improvements in both of these areas in the coming months, which would make a re-launch of the privatisation a good option.

ZAT is a fertilizer, caprolactam and polymer producer, while ZAK makes fertilizers, plastics and oxo-alcohols.

Ciech is Europe’s second-largest soda ash maker and Poland’s sole producer of toluene di-isocyanate (TDI).

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By: Will Conroy
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