Tauron Power Unit Plans to Build PLN 200 m Wind Farm

Tauron Ekoenergia, a unit of listed power group Tauron, announced a tender for the provision, assembly and servicing of a 40 MW Wicko wind farm and for a lease on the approximately PLN 200 mln project, Tauron said in a press statement.

The farm is supposed to consist of 20 windmills, each with 2 MW capacity, the statement read. Its completion is due in 2012.

Motions for admission to the tender can be submitted by August 16 and the farm should be launched within 18 months from the agreement signing, the firm also informed.

Tauron debuts on Warsaw Stock Exchange

Poland’s power group Tauron made a debut on the Warsaw Stock Exchange (WSE). The share price at the opening was PLN 5.13. The offer concerns 821,033,422 shares. Institutional investors took 615,775,67 shares while private investors – 205,258,355 shares.

Tauron shares were distributed among individual investors via WSE on Monday. Each investor received 934 shares in the company. Individual investor demand exceeded the supply by approximately 30% therefore a reduction was necessary. About two-third of the stake earmarked for institutional investors was acquired by Polish entities, particularly retirement funds; the remaining one-third of shares went to foreign investors, wnp.pl reports.

Polish Treasury Minister Aleksander Grad called Tauron’s debut a success on Wednesday. He underlined that the share price at the opening of the session on the first day of trading proves that the price was set at the right level. “I particularly appreciate the fact that 230,000 Poles purchased shares of this company. I am happy that Polish citizens are increasing better educated in business-related matters. They know it does not pay off to sell shares on the first day of trading” Grad was quoted as saying by Gazeta Wyborcza.

WSE President Ludwik Sobolewski said that Tauron debut is valuable for the capital market.

Tauron Shares Available to Foreign Investors Ahead of WSE Debut

Power group Tauron is seeing institutional investors already trade the company's shares ahead of the June 30 debut, with sellers including mainly foreign investors, the daily Parkiet writes citing own findings.

The price - PLN 0.572-0.579, equivalent of PLN 5.148-5.211 after reversed split, as given by the daily - may be indicative of the possible price development at the debut, given that market conditions don't change significantly, manager of Poland's major investment fund told the daily.

Poland Raises $1.28 Billion From Utility Tauron’s IPO

(Bloomberg) -- Poland sold 4.21 billion zloty ($1.28 billion) of shares in Tauron Polska Energia SA, the country’s No. 2 utility, after Europe’s debt crisis prompted it to price the stock near the bottom of the target range.

The Treasury Ministry sold a 52 percent stake for 0.57 zloty a share in an initial public offering, compared with a range of 0.55 zloty to 0.70 zloty a share, Treasury Minister Aleksander Grad said at a news conference in Warsaw today. Institutional investors were limited to 5 percent each.

The IPO, Poland’s third-largest since 2004, brings the government almost halfway to its goal of 25 billion zloty in 2010 asset sales to help finance the budget deficit. Poland sold Tauron even after Europe’s debt crisis prompted at least 34 companies, from London-based Ferrous Resources Ltd. to Chinese wind-turbine maker Xinjiang Goldwind Science & Technology Co., to postpone sales since the beginning of May.

“The IPO price is very attractive and offers a good discount to two publicly traded peers,” said Bartlomiej Kubicki, a Vienna-based analyst at Raiffeisen Centrobank AG.

The price gives Tauron an enterprise value, or the sum of its stock and debt minus cash, of almost 3.7 times earnings before interest, taxes, depreciation and amortization, according to Kubicki. That compares with a ratio of 4 at third-largest power group Enea SA. PGE SA, Poland’s biggest utility, is valued at 5.5 times forecast 2010 earnings.

Limits on Institutions

The limit on purchases by institutional investors also applies to copper producer KGHM Polska Miedz SA, Grad said, adding that more than 120 institutions bid in the IPO. Demand was boosted by more than 230,000 individual investors, who received 25 percent of the offering.

“The government was very wise in limiting holdings to 5 percent,” Christopher Palmer, who helps oversee $4.5 billion as head of global emerging markets at Gartmore Investment Management Ltd. in London, said by phone. “In this environment it’s important that the deals go well. By leaving some participants short it’ll help the price on the market.”

KGHM had said 10 percent of Tauron was the “optimal” stake and 0.7 zloty a share was an “attractive” price. Chief Executive Officer Herbert Wirth last week declined to comment in an interview on whether his company will buy stock on the market if it gets fewer shares than planned.

Poland was the only country in the European Union to avoid a recession last year, buoyed by exports, domestic demand and government investments. The benchmark WIG20 Index of stocks has lost 0.4 percent this year, after rallying 33 percent in 2009.

‘Quality Market’

“Poland is viewed as a quality market,” Alison Harding- Jones, managing director at UBS AG, which also helped manage the sale, told Bloomberg in Warsaw today. “There are very few places in the world where investors would feel comfortable putting their money in, and Poland is one of them.”

The sale brings Polish 2010 asset-sale revenue to 11.7 billion zloty so far, including stakes in insurer PZU SA, copper producer KGHM and oil refiner Grupa Lotos SA, according to the Treasury Ministry’s website.

UBS and UniCredit are the global coordinators of Tauron’s sale. Bank of America Corp. Merrill Lynch, ING Groep NV, BRE Bank SA, PKO Bank Polski SA, Bank Ochrony Srodowiska SA, Bank Pekao SA and Trigon also help arrange the offering.

Tauron shares will start trading on the Warsaw Stock Exchange on June 30, Grad said. The bourse said June 16 that Tauron could join the WIG20 Index as of July 5 if the value of its shares in free float reaches 5 percent of the capitalization of all the index’s members on the debut day.

Index Membership

That means Tauron would need to close about 14 percent above the issue price on June 30, with the WIG20 trading at about 2,400, according to Pawel Puchalski, an analyst at Bank Zachodni WBK SA.

The lower the WIG20’s value, the bigger the chance for Tauron to join the index, Puchalski said by phone today. The measure declined 0.7 percent to 2,379.48 today.

When the power group starts trading, the issue price will change to 5.13 zloty after Tauron conducts a so-called reverse split. The process, which multiplies the value of each share by nine, will help “avoid the risk that characterizes trading below 1 zloty a share,” Tauron said in the IPO prospectus.

For such shares a price change of 0.01 zloty, the minimum allowed on the Warsaw bourse, means a percentage change of at least 1 percent.

Tauron IPO Price Set at PLN 0.57, Retail Investors to Get 25 pct of Offer

Poland sets IPO price at Tauron power at PLN 0.57, allocation to retail investors was increased to 25% of IPO offer, but largest subscriptions will nonetheless be trimmed, Tauron said in a market filing.

Poland will trim allocation to institutional investors to 5%, Treasury Minister Aleksander Grad said at a news briefing. Poland saw 121 institutional investors subscribe for Tauron's shares, twice as many domestic as foreign institutions, Grad said.

Grad: One Share in Tauron Will Cost PLN 0.70

Power group Tauron set the maximum price for retail investors at PLN 0.70 and allowed for it to be exceeded in the institutional investors' tranche, Treasury Minister Aleksander Grad told a press conference in Katowice.

"Institutional investors will be allowed to exceed this price," he added.
Poland will sell up to 7.389 bln shares or 53% of power group Tauron with books to be run from June 4 to June 21 and issue price to be announced on June 22, the company said in its issue prospectus out Tuesday.