PKN Orlen: SB meeting could maintain CEO, extend management board

According to Puls Biznesu, PKN Orlen's president Igor Chalupec is secure in his position, but other board members might not. The press speculates that today's Supervisory Board Meeting of PKN Orlen starting at 8:00am CET might confirm Mr Chalupec as CEO, but CFO Pawel Szymanski and Capital Investment Officer Cezary Smorszczewski might be replaced. Puls Biznesu also speculates that the Supervisory Board might rule on the extension of the Management Board. Please note that according to Orlen's articles of association the Management Board may comprise from five to nine people. Currently it includes seven members.

Our view:
Market is primarily interested in a strong management of PKN Orlen. We expect a positive market reaction if the supervisory board maintains Mr Chalupec in his position. The potential extension of the board aims to increase political influence, in our view. Although it is definitely against the interest of minority shareholders, it is unlikely to have a major impact on the share price today. Market has already priced in the growing political risk through the Mazeikiu acquisition, we believe.