Hitting the brakes
The move was announced by the Treasury Ministry after the landmark privatization fell hostage to a political battle in parliament, making it increasingly unlikely that the flotation will be held in June as originally planned. "The tender has been cancelled ... due to an unforeseeable material change in circumstances which means that conducting the [tender] procedure is not in the public interest," the ministry revealed. The flotation of 20 percent of central Europe's top insurer, whose total value is estimated to be at least zł.14 billion, was to be one of the largest offerings in eastern Europe in 2005 and is eagerly awaited by cash-rich local funds.
But the government has said it will not go ahead with the sale until it has the backing of parliament, which has convened a committee to investigate alleged irregularities in the 1999 sale of a 30 percent stake in PZU.
The tender had attracted bids from four consortia, comprising Credit Suisse First Boston and Bank Zachodni WBK, Bank Austria's CA IB and Bank BPH, HSBC and PKO BP, and Citigroup with its local unit Bank Handlowy.
The government's pledge to list PZU by the end of June was a key part of its compromise in a legal dispute with Dutch group Eureko, which has sued the government for breaking a promise to sell it a majority stake.
Under the compromise reached late last year, the government agreed to unlock the company's long-delayed flotation and neither the state nor Eureko would have control over the company. Howerer, the deal was blocked by parliament's decision to investigate. (Reuters)
But the government has said it will not go ahead with the sale until it has the backing of parliament, which has convened a committee to investigate alleged irregularities in the 1999 sale of a 30 percent stake in PZU.
The tender had attracted bids from four consortia, comprising Credit Suisse First Boston and Bank Zachodni WBK, Bank Austria's CA IB and Bank BPH, HSBC and PKO BP, and Citigroup with its local unit Bank Handlowy.
The government's pledge to list PZU by the end of June was a key part of its compromise in a legal dispute with Dutch group Eureko, which has sued the government for breaking a promise to sell it a majority stake.
Under the compromise reached late last year, the government agreed to unlock the company's long-delayed flotation and neither the state nor Eureko would have control over the company. Howerer, the deal was blocked by parliament's decision to investigate. (Reuters)
