LOT public offering unlikely this year
By : Robert Wylot
LOT Polish Airlines (LOT) (http://www.lot.com.pl) has little chance of listing on the Warsaw Stock Exchange (WSE) this year, despite last week's move by the Treasury Ministry (http://www.mtigm.gov.pl) to float the company, according to Agnieszka Dluska, a press officer at the ministry.
Following Treasury Minister Aldona Kamela-Sowinska's presentation plans last week to float an unspecified portion of the airline, Dluska said there wasn't enough time before the Sept. 23 parliamentary elections to complete all the necessary preparations for the initial public offering (IPO).
The timetable for the flotation is now in the hands of the Democratic Left Alliance (SLD), which is tipped to win the elections. The SLD is known to be cautious about any plans to sell the airline in the short term.
"There is no reason to take LOT public in 2001," said Wieslaw Kaczmarek, predicted to become treasury minister if SLD wins.
Kaczmarek said that before SLD decides how to further privatize LOT, it "will first have to check whether (the airline's strategic investor) SAirGroup was, and is, the right choice or whether to look for a different solution." He said that "as long as SAirGroup's strategy towards LOT isn't clarified, there can be no question about LOT's IPO, because then we would present potential buyers with a question mark that translates into a high investment risk."
LOT's IPO is also being slowed by uncertainty about the future of the Qualiflyer group, the Swissair-led alliance in which LOT is a member.
"Qualiflyer will soon break up, especially since the airlines belonging to this alliance are posting very poor results now," said Elzbieta Marciszewska, an airline analyst with the Warsaw School of Economics (SGH).
Also discouraging potential investors in the airline is the bad sentiment currently affecting trade on the WSE. "An IPO should be conducted when the market is growing," Marciszewska said.
Although the carrier posted a modest total net profit for each of the past three years, it continues to post losses on sales, which rose to zl. 315 million ($75 million) in 2000 from zl. 61 million ($15 million) in 1999. "LOT's share in the charter and cargo market has been falling," said Marciszewska, adding that LOT needs more aircraft to compete on the global market.
Representatives of LOT were unavailable for comment.
