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Poland is preparing a bid to list a minority stake in the country's fourth largest utility Energa in an IPO, a treasury official said on January 18. The ministry hopes to follow that up with a sale of the remainder of the company to a strategic investor.

A float of up to 50% of Enrega - possibly including newly issued shares - is planned by the end of June, Deputy Treasury Minister Pawel Tamborski told Bloomberg in an interview. Warsaw will then unload the rest of the company to an investor. Those already present on the Polish power market will receive preference, he added.

"We want to pick advisers for the Energa IPO by the end of January," Tamborski said. "Our advisers will help determine the structure of the transaction to reflect the attractiveness of the company, whose focus on the distribution business helps it stand out in the industry."

Tamborski added that Energa will pay a dividend to the state before the listing goes through. State companies were forced to make payouts well above management recommendations in 2012 as Warsaw hunts cash to help it hit fiscal targets, and the treasury has promised even greater pressure this year.

The IPO will be the biggest in Poland this year, Bloomberg reported, without offering details. It's clearly a major element in the treasury's PLN5bn privatization programme for 2013, which is set to kick off with yet another attempt to sell PHN. The two failures to unload the property holding in 2012, on top of struggles to earn top dollar on other assets, did much to ensure that Warsaw missed last year's privatisation target by close to 10%.

The sale of Energa has faced its own problems recently, however. The Polish competition watchdog successfully blocked a merger of the Gdansk-based company with the country's top utility PGE in 2010. That deal - which Poland was classing as a privatisation, despite the buyer being state controlled - valued Energa at PLN8.9bn. Subsequent speculation that the company was to be merged with Poland's third largest utility, Enea, came to naught.

Investors to have shown an interest in the last attempt to offload Energa included France's GDF Suez, Kulczyk Holding, CEZ, Energeticky a Prujmyslovy Holding and PGNiG, Bloomberg reported. However, the French giant has since joined the trend that sees large European power groups shedding assets in smaller emerging markets, while CEZ needs every penny for the expansion of the Temelin nuclear power plant. PGNiG remains state controlled, so its involvement in any deal would be another "pseudo privatization."