Poland: Privatization Milestone Hailed




Libs were at work pre-Communist reforms…


“After a privatization process that has lasted for 13 years, we’re putting the dot on the ‘i’”, Treasury Minister Mikolaj Budzanowski said. “Reaching this point required dozens of meetings and flexibility from both sides.”

Zygmunt Solorz-Zak, one of Poland’s richest men, will increase his share in the vertically-integrated power group to 51.7% from 49.1% following the IPO, resolving a previous controversial arrangement in which he had operational control without the need to hold a majority stake.

The appeal of ZE PAK, as the company is also known, is the fact that it has been operated a commercial basis since 1999 and has an experienced management team, in contrast to some of Poland’s state-controlled power utilities, which are plagued with over-staffing, hundreds of subsidiaries in non-core businesses, and frequent management changes.

In July, ZE PAK acquired two lignite mines from the Polish government which supply it with about 95% of its fuel. Restructuring these mines will bring significant savings, said Chief Executive Katarzyna Muszkat, who has run the company since May 2004.

Polish companies that are or were recently controlled by the state sometimes operate on a model reminiscent of the communist-era, when each business had to be self-sufficient in the face of constant shortage, Ms. Muszkat said. This is the case of the mines she plans to restructure, which own cafeteria catering businesses and vacation resorts, among many other non-core businesses.

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