KGHM has submitted an official offer to purchase a controlling stake in power generating plant PAK from Elektrim, for unspecified amount, according to today’s ‘Puls Biznesu’. Elektrim representative reiterated that the stake in PAK is not for sale, and repeated the demand for PLN 2.0bn compensation from State Treasury, if it wanted to cancel the original privatisation agreement. The main energy market players present in Poland such as CEZ, Vattenfall, and RWE, signalled that they would be interested in purchasing PAK, if it was for sale.
Our view: We expect a negative market reaction to the news. We doubt that the PAK deal to reach conclusion any time soon. If the State decides to cancel the original privatisation agreement, it would most likely lead to prolonged legal disputes, similar to the case relating to PTC Era mobile operator. We wish KGHM would not get involved in legal battles with Elektrim, where legal costs could reach PLN millions.