bne -

After running out of fresh companies ready to float, and struggling to meet privatisation revenue targets, Warsaw is set to rely on sales of government stakes in listed Polish companies to raise funds next year, the treasury minister said on September 2.

The treasury has found the going tough in meeting its privatisation revenue targets for a couple of years, as investors variously worry over the state of the wider economy, asset quality, political interference and incomplete regulation. Warsaw has found itself forced to rely on snap sales of government stakes in blue-chip companies to keep pace.

That mode of operation now appears official. Government officials told media on September 2 that such "share packages" will fuel next year's privatisation revenue target.

Treasury Minister Wlodzimierz Karpinsk outlined that the 2014 target has been lowered to just PLN3.7bn (€869m). This year's target of PLN5bn is half of the figure seen in the previous couple of years, and the government is struggling to hit even that.

Deputy Treasury Minister Pawel Tamborski offered details of the plan later in the day. "Privatisation revenues in 2014 will come from the sale of share packages owned by the treasury ministry," he said, according to Reuters. "New IPOs seem unlikely, as there are no companies which could be attractive for the market."

The struggle to hit the 2013 target illustrates the point. The treasury ministry has raised just PLN1.89bn thus far. Of that, PLN860m came from the sale of yet another stake in the country's biggest bank, 2% of PKO BP, while 12% of newly consolidated chemicals giant Grupa Azoty sold for PLN630m.

While Warsaw finally got the IPO of real estate holding PHN out of the gate, the sale - twice pulled in 2012 - still fell well short of its ambition. Investors swallowed no more than 25% of the hastily assembled bag of state property to bring in PLN240m. The treasury had earlier hoped to sell a majority stake to a strategic investor alongside the listing.

The statements from the treasury officials suggest however that they're confident of finally pushing through the delayed IPO of giant utility Energa this year. The listing has been delayed throughout 2013, but Tamborski recently claimed the prospectus for the sale - estimated to raise up to PLN2bn - should be filed by mid-September.

However, analysts suggest the company is impossible to value until Warsaw finalises its legislation on support to renewable energy - a project that has been rattling on for some time. Warsaw also hopes to float PKP Cargo, the freight unit of its national rail operator, in 2013.