Piasecki denies selling stake in PIA

The chairman of construction firm PIA Piasecki (PIA) has denied allegations in the Polish press that negotiations with construction firms Besix of Belgium and Spain's Dragados are aimed at selling his stake in the company.

Following the breakdown of the merger of PIA with construction group Mostostal Zabrze in October, the company started talks with Besix, Dagrados and Swedish construction group NCC. This led to speculation that Andzej Piasecki and his brother Lech Piasecki will sell their 40% stake in the company to one of the three potential investors. Earlier this month, NCC withdrew from negotiations with PIA to concentrate on the Swedish market, blaming the decline of the Polish construction sector for its decision.

"There is no truth whatsoever in the allegations that we are to sell our stock in PIA Piasecki," said Andrzej Piasecki, chairman of PIA.

Wojciech Sośnierz, spokesman for PIA, said last week the company would select one of two options for a partnership with one of the two foreign construction groups. In the first, the partner would become a strategic investor in PIA and take over the 40% stake in the firm owned by Bank Handlowy (BH), a move widely expected by market observers since Mostostal Zabrze and PIA failed to agree on a share-swap ratio in August.

Alternatively, the two firms will collaborate in bids for major construction contracts in Warsaw, with PIA relying on its partner's financial strengths and contacts to obtain large construction contracts in areas such as hotel construction. "Market conditions are difficult and there are few construction contracts available," Sośnierz said. "Companies capable of attracting large contracts from serious, financially solvent clients will have the greatest chance of survival."

According to Bartosz Ostafiński, a construction analyst at Łódź brokerage Beskidzki Dom Maklerski, the purchase of BHW's stock is the more likely outcome of the negotiations as it will give a potential investor a foothold on the market. "Besix and Dagrados do not have established businesses in Poland," Ostafiński said. "If they intend to work with PIA, the best solution would be for the potential partner to buy into PIA, creating a more solid partnership that would inspire more confidence on the market." He added that because the strategy of Citibank, the owner of BHW, is to reduce its capital portfolio, the bank may see this as a good opportunity to exit from its investment if it can obtain a good price.

In the third quarter of this year, PIA Piasecki's net sales fell to zł. 113 million ($28 million) from zł. 123 million ($30 million) during the same period last year, while net profit plunged from zł. 4.2 million ($1 million) to a loss of zł. 2.1 million ($520,731) this year.

Greg Goodale