A long flight to the bourse

Poland's state-controlled national airline, Lot, will debut on the Warsaw bourse in H2 2007, according to Deputy Treasury Minister Ireneusz Dšbrowski. "The value of the IPO could reach hundreds of millions of złoty. But we want to keep a 51-percent stake in the company," Dšbrowski said.

Currently, the Treasury Ministry owns 67.96 percent of Lot. A 25.1-percent stake is held by the trustee in bankruptcy of Sairlines, former owner of Swissair, while the rest is in the hands of company employees.

The national carrier has been planning to enter the bourse for many years, but the bankruptcy of Swissair and the government's reluctance to privatize prolonged the preparations.

Marcin Borek, an analyst from Ernst & Young, says the share evaluation has to be carried out carefully. "Investors will be able to profit from Lot's shares only if the company undergoes a thorough restructuring," he adds.

Alongside Lot, the bourse could also see the debut of Lot's low-fare subsidiary airline, Centralwings. "First we want to carry out Lot's issue and then sell Centralwings. Why not sell it through the stock exchange as well?" Dšbrowski said, but added that it might not happen before the end of 2007.

Dšbrowski admitted that there had already been purchase offers from investors interested in buying Centralwings, but denied journalists' speculations that it might be taken over by the Irish Ryanair.

At the end of 2005 the estimated value of Centralwings amounted to zł.300 million, and the management says it is currently worth some zł.500 million. The company is the leader in charter flights and the third-largest low-fare airline in Poland, with a 17-percent market share. Compared to last year, sales rose by 22 percent and the number of passengers by 11 percent. In H3 2006 the company made zł.20.7 million net profit, for the first time in its history.

"In 2008 we will achieve full profitability. The company is very attractive and there will be a long line of investors," boasted Kwiatkowski.