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The Polish government was forced to price the IPO of real estate holding PHN towards the bottom of its range on February 4 at PLN22 per share. The sale of the 25% stake earned the Ministry of Treasury just PLN239m (€57m), a drop in the bucket as it kicks off a PLN5bn privatisation programme that lacks the option to rely on selling stakes in some of the country's blue-chip companies.

The treasury had set an original pricing range of PLN20-26 for the 10.8m shares, according to PAP news agency in January. The sale was Poland's third attempt to list a stake in the collection of state real estate assets - hastily assembled in 2011 and of erratic quality - following two false starts in the second half of last year.

Those failures helped the treasury fall around 10% short of its PLN10bn privatisation target for the year, which was designed to help the government reach its fiscal consolidation targets. The ministry's goal for 2013 is only half as much, but could still prove a challenge as it looks to have lost its "get out of jail free" card.

Sales of stakes in blue chips PGE and PKO raised well over half of the 2012 revenue; this year, such stakes are being handed to state bank BGK to sell, as it raises funds for Polskie Inwestycje Rozwojowe - Warsaw's flagship infrastructure fund and the government's key strategy to stimulate economic recovery and growth. An accelerated book build for a 12% stake in PKO in January raised PLN5.2bn to kick off the cause; stakes in top utility PGE and insurer PZU are likely to follow.

That leaves the treasury to try to lever PLN5bn out of the less high-profile assets left. The PHN float was its first strike, and was clearly disappointing. The pricing suggests a value of PLN956m for the entire loss-making group, points out Reuters, noting that the banks running the offer were originally hoping to raise as much as PLN1.7bn. PHN said last year that its assets were worth PLN2.5bn.

Forced to chop the holding into bite-sized chunks to get the sale away, the treasury - which has said it intends to retain a 25% stake - now plans to sell a controlling stake in PHN to a strategic investor. Polish real estate company Grupa Radius is reportedly the frontrunner, but other interested parties have been mentioned in the local press. Whoever goes for it, the low pricing on the IPO will obviously affect negotiations, despite a likely premium for control.

In January, Deputy Treasury Minister Pawel Tamborski said that in similar fashion, the ministry hopes to offload utility Energa this year via an IPO and sale of a controlling stake to a strategic investor. However, the float of Ze Pak - the last Polish utility to float in late 2012 - fell well short of the treasury's target price. Any prospective buyers of Energa would likely be wary of the demands Warsaw is putting on power companies to invest heavily in the country's drive to build up its capacity, as well as diverting them to help the hunt for shale gas.

Investors that showed an interest in the last attempt to offload Energa included France's GDF Suez, Kulczyk Holding, CEZ, Energeticky a Prujmyslovy Holding and PGNiG, Bloomberg reports. 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."