Poland sells 5.75% stake in ZAT to EBRD, 6.33% to other investors

19 April 2013 11:26  [Source: ICIS news]

LONDON (ICIS)--The European Bank for Reconstruction and Development (EBRD) is to acquire a 5.75% stake in chemicals group Zaklady Azoty Tarnow (ZAT) from the Polish treasury ministry for Polish zloty (Zl) 296.4m ($93.8m, €71.9m), the EBRD said on Friday.

A block trade deal to sell shares amounting to a further 6.33% stake in ZAT to a group of institutional investors has also been agreed, the treasury ministry said, without naming the investors.

The Poland-based company has stood as Europe’s second-largest fertilizer producer since January 2013, when it acquired control of fertilizer, melamine and caprolactam (capro) producer Zaklady Azotowe Pulawy (ZAP).

Sources at the ministry said an aspect of the deal was that it prevented Russia’s Acron mineral fertilizer group from building up its ZAT stake in preparation for possible hostile bid for the group, following the failure last year of its near-half-a-billion-euro offer for ZAT. The Polish government is generally wary of Russian influence in strategic companies that rely on Russia for natural gas.

The EBRD has committed to an equity lock-up, which means it will not be able to sell its ZAT shares for 12 months. After that period, it must give the treasury ministry first refusal on any sale it opts to make, the ministry  said. The treasury ministry retains a 33% stake in ZAT.

Having gained a 45% stake in ZAT during the latest wave of state-driven consolidations of Poland’s chemical industry, the treasury ministry was required by Polish law to reduce the stake to below 33% or announce a tender for ZAT shares not in its ownership by 24 April 2013.

Despite reducing its stake, the ministry still retains control of ZAT through various shareholder voting provisions.

In a press release, Lucyna Stanczak, the EBRD director for Poland, said: “Our involvement aims at actively promoting and supporting the privatisation process of the company. Poland has taken decisive action to consolidate the chemical sector and the next step now must be to make the players fit to compete on the global market.

“EBRD will use its stake to pay special attention to the restructuring of the company and the introduction of best corporate governance standards,” she added.

ZAT – which is in the middle of a renaming exercise that will see both itself and its subsidiaries switch to the name Grupa Azoty – reported revenue of Zl 7.1bn, earnings before interest and tax (EBIT) of Zl 372m and net profit of Zl315m in 2012, the EBRD said.

The group, which has a workforce of around 8,500 people, is expected to achieve annual sales of Zl 10bn following the merger with ZAP, it added.

The EBRD is owned by 64 countries, the European Union and the European Investment Bank.

($1 = €0.77, $1 = Zl 3.16, €1 = Zl 4.12)

By: Will Conroy
+44 20 8652 3214

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