The plan outlined by Prime Minister Donald Tusk on Friday assumes Poland to redirect part of its privatisation revenues to BGK starting from 2013 to increase its capital and through leverage allow it to finance and initiate key infrastructure and investment projects. BGK will establish an investment vehicle capitalised with revenue from the sale of state-owned assets. According to State treasury minister Mikolaj Budzanowski the value of the privatisation shares that BGK is to receive and then sell on the market to obtain capital will amount to more than PLN 10bn. Budzanowski has also stated that BGK will receive shares of those companies, where the state has majority stakes adding that the ministry does not plan to reduce its holdings at refiner PKN Orlen, Tauron or KGHM.
Our view:
PKO BP’s share price dropped on Friday following the announcement as investors seems to be discounting share overhang. However we believe that further share supply should have been already widely expected, as state treasury representatives had been openly talking about decreasing stake in PKO to just 25%. The treasury currently owns a 33.4% stake in PKO directly and another 10.3% via BGK bank. We believe share overhang is already anticipated in the stock price of PKO .