Bloomberg News

Poland Scales Down PKO Offering; Shares Gain on ‘Relief’

July 19, 2011

(Updates with comment from ministry in eighth paragraph.)

July 19 (Bloomberg) -- Poland scaled down its offering of PKO Bank Polski SA stock, bringing “relief” to investors who pushed shares in the country’s largest lender up by the most in two months.

PKO jumped as much as 2.7 percent to 41.01 zloty by 11:53 a.m. in Warsaw trading today, rising the most since May 16. The benchmark WIG20 Index added 0.7 percent. PKO had reached a 10- month low of 39.68 zloty yesterday.

The offering would be at least 6.75 billion zloty ($2.4 billion) at today’s price, the third-biggest public sale of a Polish company. The Treasury Ministry and state-owned Bank Gospodarstwa Krajowego will offer 13 percent to 15 percent of PKO, the bank said in a regulatory statement late yesterday after it filed a prospectus with the regulatory commission.

The price reaction shows that investors, who had earlier expected a sale of at least 20 percent, were “positively surprised,” Marcin Jablczynski, an analyst at Deutsche Bank AG, said by phone from Warsaw today. “With the current problems in the U.S. and the euro area, lower supply brings relief to investors.”

The transaction is planned for late September or early October, the ministry said on its website late yesterday.

PKO’s share price is “burdened” by the offering and could start rising after the sale is over, Jablczynski said.

Treasury Minister Aleksander Grad said earlier this year the government could sell as much as 26 percent, keeping control with a 25 percent holding. The final stake size would depend on market conditions, he said on March 29.

IPOs Postponed

ViOil Holding SA, a Ukrainian producer of sunflower oil; Valinor Public Limited, a Russian agriculture producer; and Wittchen SA, a Polish leather goods distributor, postponed or prolonged their Warsaw initial public offerings this month, citing worsening market conditions.

“We’ve said from the very beginning that we’d sell a stake of 10 percent or more,” Maciej Wewior, the Treasury Ministry’s spokesman, said by phone today. “We all see what’s going on in the world, and we estimate that the additional 5 percent is a safe level that the market will be able to absorb.”

The Polish government, which is looking to raise 15 billion zloty from asset sales this year to help finance the budget deficit, sold 10.1 billion zloty of shares on the Warsaw Stock Exchange this year, finding buyers for stakes in coal producer Jastrzebska Spolka Weglowa SA, power utility Tauron Polska Energia SA and insurer PZU.

At today’s price the sale would be exceeded only by the 8.1 billion-zloty initial public offering of insurer PZU SA last year and PKO’s own 7.5 billion-zloty initial public offering in 2004.

Citigroup Inc., JPMorgan Chase & Co, Goldman Sachs Group Inc. Credit Suisse AG and PKO’s brokerage were picked as global coordinators for the offering, Wewior said. ING Groep NV, UBS AG, Societe Generale and Wood & Co also help manage the sale.

--Editors: Nathaniel Espino, James M. Gomez

To contact the reporter on this story: Maciej Martewicz in Warsaw at;

To contact the editor responsible for this story: James Gomez at

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