Poland May Exceed $8.3 Billion Asset Sale Target

(Bloomberg) -- Poland may raise more than the planned $8.3 billion from asset sales this year if it completes deals to sell utilities Enea SA and Energa SA and finds buyers for the Warsaw Stock Exchange in an initial public offering.

“If the Energa, Enea, and the Warsaw bourse transactions go according to plan, we will exceed the target,” Deputy Treasury Minister Jan Bury, who is in charge of the energy sector, said in an interview yesterday.

The government plans to raise 25 billion zloty ($8.32 billion) this year to help finance the growing budget deficit. It has already booked 13.1 billion zloty from selling stakes in companies, including copper producer KGHM Polska Miedz SA, insurer PZU SA, and the country’s second-biggest power group Tauron Polska Energia SA.

On Sept. 14 the Treasury agreed to sell an 84 percent stake in its fourth-largest power group Energa to PGE SA, the state-controlled company that’s Poland’s biggest utility, for 7.53 billion zloty. PGE will now battle the antimonopoly regulator, who opposes the deal, to get the consent to complete the transaction in time for the government to book the proceeds this year.

The sale of the 51 percent stake in Poland’s third-largest utility Enea is also “very likely” to bring “decent proceeds” based on the benchmark value set in the Energa transaction, Bury said. Five companies, currently conducting due diligence in Enea, have until Sept. 27 to place binding offers.

Bury reiterated that the ministry wants to achieve a 10 percent to 20 percent premium over the market price for Enea, with the entire company valued at 9.27 billion zloty at 9:43 a.m. in Warsaw trading today.

Enea Bidders

Based on the yet undisclosed list of Enea bidders, Bury sees “no risk” that the regulator could block the sale.

While the ministry is “determined” to reach the 25 billion-zloty target, it won’t attempt this year to sell a stake in PGE itself to make up for a possible lack of Energa or Enea revenues, Bury said.

“Such a gap would be difficult to cover,” he said.

The Treasury now holds 79 percent in PGE and the government’s strategy obliges it to keep a majority stake in the company that went public last year, holding the biggest European IPO of 2009. The deputy minister maintained the plan to sell a stake of “10 percent or a bit more” in the utility next year. The company’s market value increased to 45.1 billion zloty today, after shares rose 0.5 percent in Warsaw.

Poland wants the Warsaw bourse to start trading in November after the IPO, in which the government plans to sell a 64 percent stake.