By Marcin Sobczyk
WARSAW--The Polish government plans to retain control over its
top companies and won't conduct any more large-scale asset sales, a
senior treasury official said, undoing a policy cornerstone that
saw the country transition from a centrally planned economy to a
free market after the fall of communism.
Instead, the government is urging the large companies it
controls to grow their businesses in Poland and beyond.
The privatization of state enterprises had propelled the Warsaw
Stock Exchange into the top 10 of Europe's markets by value of
listed companies, with the government responsible for some of
Europe's largest initial public offerings in their respective
years: insurer PZU SA was the second-largest IPO in 2013, fetching
EUR1.99 billion; while coal miner JSW fetched EUR1.35 billion in
2011, the fourth-largest European IPO that year.
But trading volumes were disproportionately small, partly a
result of the state retaining large chunks of shares in Warsaw blue
chips.
In May, the Warsaw Stock Exchange was the eighth-largest market
in Europe by value of domestic companies traded--around EUR149
billion-- but trading volume was only EUR3.9 billion, similar to
the market in Athens which is half Warsaw's size in terms of the
value of listed companies, according to data from the Federation of
European Stock Exchanges.
Eager to keep control of what is left of the family silver, the
government won't hold any large IPOs in the foreseeable future,
said Deputy Treasury Minister Wojciech Kowalczyk, a former deputy
finance minister.
"Our main goal is building value and not privatization for
privatization's sake," said Mr. Kowalczyk, who was appointed to his
new job in June. "Large privatizations are behind us," he told
reporters.
With much investment needed in power generation, oil and gas,
and roads, Poland designed a public-investment program fueled with
government-owned stocks.
On Wednesday, the program's operator--known by its Polish
acronym PIR--raised about 1.2 billion zlotys ($396 million) selling
shares in Poland's largest power utility PGE SA (PGE.WA). But even
after the transaction, the government still controls more than
58%.
Given the new approach to asset sales, Poland is likely to
generate far less in privatization revenue than in recent years.
Last year, it budgeted for PLN3.7 billion in such revenue in 2014,
a goal it has in the meantime dropped.
"Privatization revenue for 2015 could be lower compared to this
year, when it may also be lower than projected in the government
budget," Mr. Kowalczyk admitted.
Write to Marcin Sobczyk at marcin.sobczyk@wsj.com