Poland officially halts privatisation

Poland officially halts privatisation
Polish Prime Minister Beata Szydło visits the construction site of new Jaworzno power plant last week. Tauron Energy Co., the utility operating the plant, was privatised by Poland's previous government.
By bne IntelliNews February 28, 2016

Poland's government will "wind down" privatisation, increase its oversight of state-controlled companies, and plans mergers, the treasury minister said on February 26.

The Law and Justice (PiS) party, which took office in November has a statist view on the economy. It has long criticised previous sell-offs of state-controlled companies, many of which dominate their sectors and are listed in Warsaw. The administration announced early in its reign a plan to liquidate the treasury, which was tasked with further privatisation under the previous, market-friendly, Civic Platform (PO) government.

Treasury Minister Dawid Jackiewicz told a news conference that the previous policy was wrong and will be discontinued. Privatisation deals will now only take place for companies that are in trouble and “without importance for the national economy,” the official stressed.

"We have taken a different approach than the previous government to the state's assets management. We are winding down privatizations, we will privatize only those companies that are redundant," Jackiewicz told a news conference, according to Reuters.

The statement comes in the wake of legislation approved by the Polish parliament on February 11 that should end the treasury ministry’s supervision of state-controlled energy companies by the summer, to place them under the energy ministry. Companies outside energy, such as PKO BP - the country's largest bank - and insurance giant PZU, will likely be moved at some point under the management of a new state-owned company or agency.

Meanwhile, the treasury ministry has identified 19 business areas for potential consolidation, Jackiewicz said. By mid 2017 Warsaw plans to launch a capital group that would feature the likes of copper miner KGHM, chemicals group Azoty, PKO BP and PZU, with an aim of "increasing their value".

PiS has also said it plans to to scrutinise previous privatisation deals. The government is currently probing the privatisation of PKP Energetyka, which PiS had said before the October election it would like to block.

Another deal that raises doubt is the sell-off of a 10% stake in copper and silver miner KGHM in 2010, according to Jackiewicz. “If I had financial means, I would definitely seek to strengthen the state’s control of key companies,” Jackiewicz said, claiming that privatisation has often increased the vulnerability of state companies to hostile takeovers.

Given PiS' clear stance and repeated comments, the official halt of privatisation is unsurprising. Some now speculate that - like in Hungary, which is a source of inspiration for the new Polish government - Warsaw may now seek to renationalise some companies. Energy would appear the most likely target.

 

Related Articles

RBI doubles net profit y/y in Q1 as Russian business recovers

Raiffeisen Bank International (RBI), the second largest bank operating across Central and Eastern Europe by assets, reported that net profit almost doubled year-on-year to €220mn in the first ... more

Poland shrugs off EU bid to toughen rule of law probe

The EU’s General Affairs Council urged Poland on May 16 to talk with the European Commission about its alleged violations of the rule of law, as Brussels continued to hold back from imposing ... more

Moody’s raises outlook on Poland to stable

Moody’s Investor Service affirmed Poland’s sovereign credit rating at 'A2' on May 12, and raised the outlook on the sovereign to stable. The improvement of the outlook comes on the back of ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss