Poland chemicals privatization slows to a snail's pace

As predicted by this blog, the unrealistic expectations of Poland's treasury officials mean that they have halted the privatization of chemical firms Zaklady Azotowe Tarnow (ZAT) and Zaklady Azotowe Kedzierzyn (ZAK).

The privatization agency, Nafta Polska, reported the decision on Thursday after a binding bid for controlling stakes in the firms submitted by Germany-based Petro Carbo Chem (PCC) proved unsatisfactory.

According to ICIS news, "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.

After so many stops and starts, yet another delay is unsurprising. Perhaps improving economic conditions in Poland and across central and eastern Europe will start to improve the performance of these companies. Only then will valuations rise to a level acceptable to the Polish state. We could be in for a long wait though.