Ministry stake in Poland's Ciech “may be sold”: source

18 October 2013 17:42  [Source: ICIS news]

LONDON (ICIS)--The Polish treasury's 38% stake in Poland-headquartered soda ash producer Ciech could be privatised before the end of this year to raise funds for infrastructure expenditure in the country, a state source said on Friday.

The source, an official at state-owned infrastructure investment vehicle Polskie Inwestycje Rozwojowe (PIR), said that the ministry was interested in selling the stake via an accelerated bookbuild on the capital markets, which involves offering shares in a short time period with little to no marketing.

“It's the case that no strategic investor has come forward, even though the ministry has this year let it be known it would sell [for] a good offer. The accelerated bookbuild is now very much an option because the company has done well with its restructuring and its share price is high,” he added.

However, a chemical industry analyst at a bank who covers Ciech, but preferred to remain anonymous, said that the treasury ministry risked making a financial blunder by selling its stake in the company through this approach.

“To me it's strange that there is no strategic investor interested in the stake, but by going for the accelerated book build they lose the option of waiting for restructuring effects to become visible at Ciech after which they could sell the stake at a better price to a buyer later on,” he said.

If PIR, which is controlled by the treasury ministry, is in a hurry to find funds to stimulate stalled economic growth in Poland through infrastructure spending, it should perhaps look to the divestment of state stakes in utility PGE and insurer PZU, he added.

Analysts at several banks have valued the treasury ministry's stake in Ciech, which has soda ash producton units in Poland, Germany and Romania, as well as a plant protection chemicals business, at approximately zloty (Zl) 500m ($163.9m, €119.9m).

($1 = €0.73, $1 = Zl 3.05, €1 = Zl 4.17)

By: Will Conroy
+44 20 8652 3214

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