News Parkiet

Privatization

Stocks down on government giveaway plans

Polish government could give away shares of publicly traded companies worth as much as 2.5 billion zloty to ailing state companies and agencies, Treasury Minister Jacek Socha said yesterday.

'We'll have to give away large stakes in either KGHM or PKN Orlen. It can't be done any other way', Socha said after announcing massive giveaway plan.

Shares of two largest state firms, PKN Orlen refinery and KGHM copper mine fell sharply after the announcement. Polish government still owns 44 percent of KGHM. It has a smaller, 28 percent stake in PKN Orlen, but market watchers say the Treasury is likely to retain its interest in the company.

Jacek Socha, who criticized similar practice while serving as the head of Poland's Securities and Exchanges Commission said state-owned mine holding Kompania Węglowa needs at least 400 million zloty in liquid assets to stay afloat. Other recipients include Agencja Rozwoju Przemysłu restructuring agency, which could receive up to 95 million zloty.

By the end of this year Kompania may need another 500 million zloty, Socha added in a speech at the Polish parliament. State-owned BGK Bank, which manages Poland's public finances, may receive up to 1.5 billion zloty ($420 million), shoring up its equity.

Taxes

Belka's tax cut unlikely to make a difference

Planned income tax cuts are far too small to make any difference for low-income employees, ostensible beneficiaries of prime minister Belka's recent tax changes. Workers making minimum wage, now at 840 zloty before taxes will save just 13 zloty per month, or 166 zloty per year because of new tax-exempt limit proposed by Belka. Annual savings for employers are even lower, at 120 zloty per each employee.

Power industry

Rafako planning new stock sale

Publicly traded power industry contractor Rafako SA is considering a secondary stock offering in the third quarter of this year to pay for new equipment. Sources following the company say domestic pension and investment funds support the plan.

Separately, Rafako confirmed again on Tuesday it lost a 40-million euro contract at Elektrownia Kozienice power plant to a consortium of Hitachi and Poltegor. Earlier this year Rafako won two other contracts at Bełchatów power plant, totaling over 210 million euros.

Internet

MCI to try to save Wirtualna Polska,

sources say

MCI Management venture capital fund together with several private investors are trying to buy bankrupt Wirtualna Polska Internet portal, Poland's second largest, Money.pl financial website reported yesterday. MCI, together with Wirtualna's former chief executive Marek Borzestowski and an unnamed 'leading Central European bank' are reportedly offering 35 million zloty for Gdynia-based portal.

Wirtualna Polska went bankrupt in mid-April after a lengthy dispute between its shareholders.

Pharmaceuticals

Polfa Tarchomin merger in doubt

Polish government is rethinking its plans to merge money-losing Polfa Tarchomin drug marker with two other state-owned pharmaceutical firms. Treasury Ministry, the formal owner of Polfa Warszawa and Polfa Pabianice said earlier it wants to sell future Polski Holding Farmaceutyczny on the Warsaw Stock Exchange after combining the three firms.

Polfa Tarchomin lost over 21 million zloty on sales of PLN 295 million last year, down one percent compared with 2002.

Pension funds

Polsat bid for competing pension fund

too low, sources say

PTE Polsat pension fund won't buy competing OFE Kredyt Banku because it's offer for the company is too low, market sources said earlier this week.

Polsat reportedly offered 30 million zloty ($8 million) for Poland's smallest private pension fund. Both firms denied rumors about failed talks and said the transaction will go ahead as planned after regulatoryBelgian KBC, which owns Kredyt Bank, has to sell one of its two Polish pension funds after taking control over Warta insurance group.