In a press office announcement, the Treasury Ministry said it did not intend to issue employee shares to over 61,000 present and former staff of PGNiG oil and gas distribution monopolist. The Treasury's decision to raise pay by 7 percent at the most profitable firms in the group failed to defuse tension between trade unions and the Treasury over the shares. The unions announced they would not give in and had decided to take the case to court. According to head of the PGNiG unions association, Dariusz Matuszewski, the Treasury could use the pre-emptive right to employee shares. Yet, according to Treasury spokesperson Agnieszka Dluska, the privatisation process at PGNiG should be postponed, and the Treasury's stake in the firm should remain intact until the new restructuring plan for the monopolist is ready. The ministry fears that privatization will reduce state control over the gas transmission system.
Our view: Since the issue of the additional shares for the employees is earnings-dilutive we regard it as a negative step from the minority shareholders prospective. Additional wages, however, will mean the worsened margins for the company. We think that the parties will look for the mutual compromise and until that do not expect any major implication for the share price.