KGHM seats return to foreign investors
The government returned private investors to KGHM Polska Miedz's (http://195.94.194.169/en/index/index.php) board of supervisors last week and Treasury Minister Aldona Kamela-Sowinska confirmed that an additional 10% of the copper giant will be privatized, though no timeframe has been set.
Marek Wierzbowski, a partner at U.K.-based law firm Linklaters & Alliance and chairman of the Warsaw Stock Exchange's (WSE) supervisory board, was appointed to represent Global Depository Receipts (GDR) holders on KGHM's supervisory board.
"For sure it's a gesture by the treasury toward international investors," Wierzbowski said.
"GDR holders should be satisfied because they have somebody to represent them on the board," said Wojciech Marciniak, investor relations director for KGHM. "I think this is a very good representative, so (the reaction) should be positive."
In a separate announcement, Kamela-Sowinska said the treasury will choose an adviser for privatizing another chunk of KGHM and that the transaction could be completed this year. KGHM is uncertain how the stock will be floated.
"What we know is that there is the intention to sell the 10% stake but this has been postponed for the last two years," Marciniak said. "The situation is rather difficult because the shares are quite low, so the minister could be criticized when she sells."
KGHM's stock was trading at around zl. 20 per share last week, down about one-third from a year ago. The company is traded on exchanges in London and Warsaw: It is not clear if the new float would be on one or both of the markets.
Piotr Kazimierski, co-head of equity sales at SG Securities, said that the reappointment of a GDR share representative is unlikely to affect share price "but it adds to the better sentiment about the company."
With the appointment of Wierzbowski, Kamela-Sowinska reversed a move by her predecessor and bolstered relations with foreign shareholders. In December former minister Andrzej Chronowski replaced the treasury's five representatives to the board of supervisors and added a sixth seat by ousting the international shareholders' representative. The move was unpopular among the investors, who found themselves with no representation in company management, and undermined confidence in the company.
GDRs are certificates of share ownership, not actual shares, traded on the London Stock Exchange: The international investors hold more than 20% of the company's shares, while the treasury holds just under half.
In addition to Wierzbowski, the treasury appointed two new members to the board and removed three. Company employees control three remaining seats on the supervisory board.
