Investors' privatisation hopes for Croatia's Petrokemija cool - bank

05 February 2013 18:00  [Source: ICIS news]

LONDON (ICIS)--Investor interest in Croatian fertilizer producer Petrokemija has cooled off following the “cold shower” caused by the economy ministry's announcement that the company is unlikely to be privatised soon, Erste Group Bank said on Tuesday.

“We again place Petrokemija among underperforming stocks,” the bank said in a note to investors.

“Speculation over privatisation is no longer the main topic, since the economy minister has dismissed such a possibility. We see a possible gas price revision as the big price driver, although we do not believe that this will happen in February. Most likely the stock will be under pressure from the fourth quarter 2012 result, which will most likely be a net loss, according to our calculations,” it added.

Investors hopes that Petrokemija, which has an annual fertilizer capacity of 1.35m tonnes, might be privatised in the near future rose at the end of last year when the Central State Administrative Office for State Property Management said the company is not listed among Croatia's strategically important companies, Erste said.

However, the statement from the economy minister, plus a denial from Russia's Gazprom that it had any interest in buying Petrokemija, dampened stock investor appetite to the extent that even a December announcement from the company of a one-year contract to provide Gazprom with 130m cubic metres of gas failed to garner much interest, Erste added.

Last October, Erste said privatisation could transform the fortunes of Petrokemija if it delivered a cheap gas supplier as a strategic owner.

By: Will Conroy
+44 20 8652 3214

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