Poland to keep its chemical set as investors shun Ciech

By bne IntelliNews July 26, 2012

Tim Gosling in Prague -

The Treasury Ministry said on July 25 that it sees no interest from investors in buying state-controlled chemical group Ciech, suggesting Warsaw will finish 2012 with its portfolio in the sector intact, despite its declarations.

Although Czech investor Zdenek Bakala was reported in May to be planning to launch a bid for the company, deputy Treasury Minister Rafal Baniak told reporters that there is now no interest from investors. Whether that is due to raised fears over the Eurozone crisis or Poland's recent move to form a sector giant by merging Azoty Tarnow and Pulawy is unclear.

Therefore, just two months after Warsaw reiterated plans to offload all of its Polish chemicals assets as part of its PLN15bn (€3.6bn) privatization programme for 2012-13, it looks likely that the state will end the year with the same level of interest in the sector as it started.

In the face of an offer from Russia's Acron for Tarnow, and from Polish rubber maker Synthos for Pulawy - an offer Warsaw suspected may be a front for eventual Russian interest - earlier this month, Poland made the sudden decision to merge the pair as a defence against the offers. Given that Tarnow is already the country's largest chemicals company by far, that will create a massive, state-controlled, conglomerate.

At the same time, reports suggest that the government sees the chemicals sector - a huge consumer of gas - as a vital support to its drive to develop Poland's energy resources. The potential for interference on energy supply choices therefore may also be a worry for potential investors. Ciech, which had a market capitalization of PLN968m in May, according to Reuters, struggled with its margins in 2011 to end the year with net profit of just PLN1.5m.

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