Poland seeks cancellation of PKP Energetyka sale

By bne IntelliNews September 18, 2016

Poland's PKP has filed a motion with a Warsaw court seeking to cancel last year’s sale of energy unit PKP Energetyka to private equity fund CVC Capital Partners, the state-owned rail company said on September 16.

The motion follows a change of leadership at PKP by the statist Law and Justice (PiS) government early in 2016. PiS has said many times that the sale should not have taken place, claiming that PKP Energetyka has a strategic role in Polish energy security. The country's fifth largest utility, the company is the only supplier to and operator of the power grid on the country's rail network.

PKP Energetyka was sold by the previous government to CVC Capital Partners in July 2015 for PLN1.96bn (€475mn). A report by audit office NIK said in June that the sale, while in line with the law, carries “significant long term risks.”

The new owner could sell PKP Energetyka after it has achieved a satisfactory rate of return on investment, NIK warned, echoing the claims of PiS officials at the time of the deal that CVC could hand the company to Russia. The next owner might be an entity “undesirable from the point of view of Polish markets of rail freight or energy,” NIK added.

A CVC Capital Partners’ representative told PAP he did not know the details of the motion nor “any circumstances during the privatisation process that would justify it".

"The privatisation process was fully transparent, in line with the law and has been verified by the prosecutors office and the Supreme Audit Chamber revealing no irregularities," the spokeman said.

PKP’s move may signal a new wave of turmoil for state-controlled companies in Poland. It came just one day after the dismissal of former treasury minister Dawid Jackiewicz, whose oversight of state-controlled companies was called into question by PiS, which has pledged it will take comprehensive control.

 

 

 

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