News Parkiet

Privatization

Government position at ZE PAK weakened by privatization deal

Polish government has little chance of wresting back control over Zespół Elektrowni PAK power plant from Elektrim group despite its 50 percent stake in the company. Five years ago Poland sold 38 percent of ZE PAK, the country's second largest power plant to Elektrim power and telecoms group. Under the terms of privatization agreement with Elektrim, officials at the Treasury are supposed to back Elektrim's choices for board members and senior executives until 2008. The government will be left with just one board member.

In return, Elektrim pledged to invest at least 1.4 billion zloty on upgrades at Pątnów I, one of ZE PAK's several power generating plants plus another 2.1 billion zloty at other facilities. Warsaw-based holding has actually spent only a fraction of that amount and is still trying to arrange financing to restart the upgrades program. The conglomerate also promised it would keep ZE PAK operational at least until 2008. Sources at the power plant now say the group has no money to pay its bills and is on the brink of bankruptcy.

Inflation

Polish CPI higher, another rate hike more likely

Poland's inflation rate rose as much as 4.4 percent in June, making another interest rate hike much more likely. Economists blame higher food prices because of strong demand for Polish agricultural products after the country joined European Union earlier this year.

Monetary Policy Council has already raised interest rates by 50 basis points at its latest meeting in late June.

Finances

Eurofaktor to file for IPO

Eurofaktor SA, Poland's largest independent factoring firm is reportedly planning to file for IPO on the Warsaw Stock Exchange. Silesia-based company has about 5 percent of the Polish market. Last year Eurofaktor bought 600 million zloty worth of receivables, mainly from power industry companies in Southern Poland.

Media

Broker FM down 9.5 percent on IPO

Shares of Broker FM broadcasting group sunk 9.5 percent in their first day of trading on the WSE from their IPO price of 83 zloty, closing at 75.1 zloty ($20.8) yesterday. Founders of Kraków-based owner of RMF FM pop radio station, Poland's most popular, raised an estimated 103 million zloty selling 1.25 million shares in late June. Broker FM initially planned to sell as many as 300.000 new shares and about 250.000 additional existing shares, but was forced to scale down the size of its IPO after a negative report by CR Media Consulting, radio industry consultancy and questions about the company's finances by Włodzimierz Czarzasty, influential member of Poland's media regulator KRRiT. Kazimierz Gródek, Broker's vice CEO says company's shareholders lost some 70 million zloty in IPO proceeds because of negative coverage. Company officials say Broker FM or its owners may sue Mr. Czarzasty and CR Media Consulting for damages.

Energy

TIM planning international expansion

Wrocław-based supplier of electrical products TIM SA has announced plans to enter new markets in the Czech Republic and Germany after talking with local companies there. 'We are discussing possible acquisitions with foreign firms', chief executive Krzysztof Folta told PARKIET. Folta, who owns 18.4 percent of TIM, a company with annual sales of 150 million zloty, says the German market is more than ten times larger than the domestic market, worth under 1 billion euros.

Equity market

SEC names people stripped

of stockbroker licenses

Polish Securities and Exchanges Commission broke its usual practice by publishing names of stockbrokers, who lost their licenses because they broke securities regulations. On Wednesday, the SEC said it has stripped the license of Andrzej Kimak, an employee of the now-defunct DM Elimar brokerage. 'We want the market to know more. If there are no objections, we're gThere are now 1786 licensed stockbrokers and 222 investment advisors in Poland.

Chemicals

Radpol to list on the WSE

Heat-shrinkable pipe manufacturer Radpol SA has announced publicly plans to list its stock on the Warsaw Stock Exchange in the fall of this year. The company, controlled by US venture capital fund Tar Heel Capital R says it wants to raise about 40 million zloty, or 11 million dollars. Existing shareholders are planning to sell part of their stakes.

Last year Radpol reported net earnings of 3.7 million zloty on sales of PLN 19 million.