Strategic investors get go-ahead to buy into PKN Orlen

The Cabinet Economic Committee (KERM) yesterday gave the Treasury Ministry the go-ahead to sell an 18% stake in leading oil company PKN Orlen to a strategic industry investor. The decision still has to be approved by the Cabinet, but according to a KERM member quoted by Gazeta Wyborcza as a 'confidential source', the decision should be "just a formality". Initially, the Treasury had intended to sell the 76 million PKN Orlen shares on the Warsaw Stock Exchange (WSE), but with the weakness of the stock market in the past few months, the price of PKN Orlen shares has plummeted from zl.21 to zl.17.6, reducing the state's potential profit by zl.250 million. The Treasury was also persuaded to alter its initial decision by offers from potential strategic investors, Austrian oil company OMV and its Hungarian competitor MOL. PKN Orlen is planning to make its final choice of a strategic investor in August and to finalize the deal in September or October. The revenue from the transaction should reach the state treasury by the end of the year. However, there is some opposition to the sale. Democratic Left Alliance (SLD) representative Wieslaw Kaczmarek accused the PKN Orlen board of attempting to take production out of the country instead of creating a strong petrochemical sector in Poland. (Gazeta Wyborcza, p. 27; Prawo i Gospodarka, p. 11; Reuters) M.T.K.