Power play on two fronts

State-owned Czech power company CEZ has announced that it will dual-list its shares on the Warsaw Stock Exchange (WSE) by the end of October this year. With a market capitalization of some EUR 17.7 (zł.70.5) billion, Central Europe's largest electricity company would become the largest foreign stock traded on the WSE. CEZ is already listed on the Czech bourse.

"CEZ will be by far the biggest foreign company listed on the WSE. The debut will increase the WSE capitalization by 15 percent and the value of all foreign companies listed at WSE by 77 percent," Martin Roman, CEZ CEO told WBJ.

The company says it is entering the Warsaw bourse to take advantage of Poland's $60 (zł.239) billion pension-fund industry.

"There's no single power stock listed on WSE," said Roman. "We'll be the only utility, which is the kind of investment preferred by institutional investors such as pension funds. We trust we'll be one of the 10 core holdings in their portfolio.

"We also want to show how dedicated we are to the Polish market. We bought the first assets here, the power plant in Skawina, and we want to participate in potential upcoming privatizations," Roman added.

The new listing may not be the only shakeup in the offing for Poland's energy market. The chief executive of Polish state-owned power company BOT said that prices for consumers may rise by as much as 30 percent as power plants struggle to find funds to modernize.

"With the current wholesale price of zł.120 per megawatt hour, it is difficult to talk about financing investments. As a consequence, wholesale prices will increase," BOT chief executive Paweł Skowroński said.

"This may affect other sectors of our economy," he added. (Reuters)