Privatization of PZU seems to be losing its way

The conflict between Eureko and the State Treasury may seriously delay PZU's plans to go public. As a result of the impasse, the validity of the issue prospectus has expired and the status of the privatization advisor is now highly uncertain. The consortium of ABN Amro, Merrill Lynch and Dom In westycyjny BRE has already performed some of the tasks which it was obliged to do under an agreement with the Treasury, concerning preparation for a domestic and international issue of PZU shares. However, in view of recent changes in the insurer, such as the appointment of a new management board, changes to the organizational structure and the creation of a new strategy, much of the work connected to the initial plans for privatization seems to have been carried out in vain. While it is not easy to determine whether the agreement with the consortium is still valid, it seems that, given minister Kaczmarek's plan to float just 5% to 10% of PZU shares, cooperation of globally recognized banks would not be needed any more. However, as analysts have pointed out, even such a step would be almost impossible without acceptance of minor shareholder, Eureko. (Puls Biznesu, p. 4) M.K.