Strategic withdrawal

Just months before the Warsaw Stock Exchange's planned privatization, the bourse's management board, together with the Treasury Ministry, has announced a change of plans. The future shareholder structure of the WSE has been altered to ensure that no entity can gain full control over it and a dividend payout will take place before privatization.

According to Deputy Treasury Minister Michał Chyczewski, the changes take into account the changing situations on the global and Polish economies.

The privatization will still take place in two phases, with the first to be completed by the end of this year and the second to take place around two years later. The Polish Financial Supervision Authority is currently reviewing the issue prospectus and is expected to finish in mid-October.  The WSE's listing is scheduled for November 27.

While only 47.82 percent of shares were originally to be offered, according to the new strategy a stake of 60.57-65.67 percent will be sold. Of that, around 31-36 percent will be offered to a group of 50 institutional investors; the names of the institutions have not been released, however. The remaining 25-35 percent, all non-voting shares, will be sold publicly.

By these means, the State Treasury will reduce its stake in the bourse to below 38 percent, but will retain 51 percent of votes. Non-voting shares will be compensated by dividends 2.5 times greater than those of voting shares.

The WSE will also pay out a dividend of zł.400-450 million from its 2007 profits before its privatization. "We cannot privatize the cash," said Ludwik Sobolewski, president of the bourse. The main beneficiary will be the Treasury and brokerage houses, the latter of which have a minor (1.8 percent) share in the exchange.

Not everyone is pleased by the WSE's new strategy. Wiesław Rozłucki, a co-founder and former president of the bourse, told TVN CNBC that the move could not be called privatization.

"The public offer is a step in the right direction, but rather modest," Rozłucki said.