Aug. 5 (Bloomberg) -- Poland sold a 3.1 percent stake in Bank Pekao SA, the nation’s biggest lender by market value, for 1.08 billion zloty ($377 million), helping to finance the country’s widening budget deficit.

The government sold “almost” 8 million shares in the UniCredit SpA unit at 135 zloty, Maciej Wewior, a spokesman for the Treasury Ministry, said in a telephone interview. While Poland had planned to sell its entire 3.95 percent stake, it only received enough offers at that price for about three- quarters of the shares, said a person familiar with the sale who declined to be identified. The government wants to offer its remaining stake for “at least the same price” by the end of the year, Wewior said.

Pekao shares fell 3.2 percent to 133.1 zloty, extending yesterday’s 4.5 percent retreat.

“We can probably expect more sales of state stakes in listed companies after Pekao, as the government needs cash to finance its budget deficit,” said Maciej Szczesny, a London- based analyst at Nomura International Plc. “These are liquid assets and probably offer cheaper financing than selling debt instruments.”

Poland needs funds after increasing its budget-deficit target last month by 48 percent to 27.2 billion zloty as the worst economic slowdown in almost a decade squeezes tax revenue. Proceeds from the sale of state assets help the government limit borrowing needs.

Bank Handlowy SA, a unit of Citigroup Inc., sold the shares in the Polish lender on behalf of the government.

Swelling Deficit

The government is planning to sell all of its “leftover” stakes in Warsaw-listed companies by the end of the year, Wewior said yesterday. Poland plans to raise 12 billion zloty this year, selling assets which include controlling stakes in power group Enea SA, the Warsaw Stock Exchange and chemical producer Ciech SA.

Poland’s holdings in listed companies include 4.2 percent of Telekomunikacja Polska SA, the country’s biggest phone company, according to Bloomberg data. The bank doesn’t comment on its shareholders’ transactions, said Arkadiusz Mierzwa, a spokesman for Pekao.

The government also owns stakes of less than 5 percent in Handlowy, Bank Zachodni WBK SA, Bank BPH SA as well as Grupa Kety SA, the nation’s biggest aluminum-products maker, according to the Treasury’s Web site.

To contact the reporter on this story: Sarah Jones at sjones35@bloomberg.netPawel Kozlowski in Warsaw pkozlowski@bloomberg.net

Last Updated: August 5, 2009 12:22 EDT