News Parkiet

Equity market

PKO BP institutional offering may be ten times oversubscribed

OFE pension funds may have signed up for 60 billion zloty ($17.6 billion) worth of shares of PKO BP in the ongoing privatization of Poland?s largest bank, market watchers say. Local money managers say only a small fraction of institutional orders will be filled when Polish Treasury makes its preliminary allocation of PKO BP shares on November 3rd. They expect preferential treatment of OFE pension funds at the expense of asset management firms and mutual funds. On average, they say, PKO BP offering may be oversubscribed by ten times or more.

Equity market

Privatization IPOs need

more transparency

Poland should reconsider pricing and other practices related to privatization IPOs after the controversies surrounding two recent offerings, PARKIET columnist Krzysztof Stępień says. Retail investors who wanted to buy shares of PKO BP had to pay the money upfront even before the final pricing of the bank?s 6 billion zloty offering. No such restrictions exist for institutional investors, who participated in book-building process. What?s more, book-building results were not announced officially before the WSE started accepting orders from retail investors.

Treasury officials refused to comment on the situation. One SEC official who agreed to talk to PARKIET denied that IPO rules discriminate retail investors. ?It?s just that different categories of investors follow different rules when they sign up for shares?, he said.

Stępień, who?s part of PARKIET technical analysis section, says all investors should have an opportunity to set their own price, buying shares in a regular stock exchange auction open to all market participants.

Power industry

ZE PAK to sign key energy trading contract this week

Elektrim?s Zespół Elektrowni PAK power plant could sign a fourteen-year energy trading contract with PSE Electra power grid operator as early as this week, sources close to the situation told PARKIET recently. PAK, one of Poland?s largest power plants, needs Electra deal to secure the financing for the completion of Pątnów II power block. Dozens of power industry contractors, including Polish unit of Alstom Power, Elektrim and its various subsidiaries stand to gain from the resumption of multi-million dollar Pątnów II project that has dragged PAK to the brink of insolvency.

Civil engineering

Polimex-Mostostal won?t pay much for Inofama

Polimex-Mostostal, no. 2 construction group listed on the Warsaw Stock Exchange says it won?t pay much for Inofama galvanizing plant, an Inowrocław company put on sale by the Polish government. Polimex and two other private firms made their bids for Inofama earlier this year.

?We thought Inowrocław plant would be in much better shape?, Polimex vice-CEO Aleksander Jonek told PARKIET on Friday.

?Their margins are basically zero. If we win, we have a turnaround situation?. Polimex-Mostostal won?t call off its bid, Jonek said, but it doesn?t want to overpay.

?Inofama isn?t worth all that much. Certainly much less than their book value (PLN 33 million), Jonek said.

Pulp & paper

Millennium DM downgrades Świecie to ?reduce?

Millennium Dom Maklerski has downgraded its rating for Frantschach Świecie packaging manufacturer from ?neutral? to ?reduce? this week, citing rising zloty and the shortage of wood pulp. The broker has a target price of 56.3 zloty for the stock. Swiecie, which is part of Anglo-American group, closed at 62 zloty on Friday.

Health services

Unimil to buy German parent company, CEO says

Unimil condom-maker has announced details of the planned purchase of its parent company, Germany?s Condomi AG, scheduled later this month. Chief executive Grzegorz Winogradski told PARKIET his firm plans to raise approximately 100 million zloty ($29.4 million) to finance the purchase of Condomi?s debt from several banks and from its original owners, with the option to buy almost 40 percent of its equity at 0.73 euro per share.

Unimil, which has 70 percent of the Polish market, plans to use the acquisition to expand into Western Europe, the US and South America, turning into Europe?s biggest condom manufacturer.