Poland to Pick Energa Investor This Year After IPO

Poland plans to pick an industry investor for Energa SA, its fourth-biggest utility, this year after selling a minority stake in an initial public offering by the end of June.

The government will give preference to an investor already present on Poland’s power market, Deputy Treasury Minister Pawel Tamborski said in an interview in Warsaw today. The IPO of as much as 50 percent of Energa may include a new share sale as the Gdansk-based company needs funds for expansion, he said.

Poland has sold to the public minority stakes in Energa’s bigger competitors, including PGE SA, Tauron Polska Energia SA and Enea SA, in past years, while keeping majority holdings in state hands. The offerings helped the government finance its budget deficit and curb borrowing needs.

“We want to pick advisers for the Energa IPO by the end of January,” Tamborski said. “Our advisers will help determine the structure of the transaction to reflect the attractiveness of the company, whose focus on the distribution business helps it stand out in the industry.”

Before the IPO, set to be the biggest in Poland this year, Energa will pay a dividend to the government, Tamborski said.

Second Attempt

The search for an industry investor will be the ministry’s second attempt after the Polish antitrust regulator blocked Energa’s sale to PGE in 2010 in a deal that valued the company at 8.9 billion zloty ($2.88 billion). Investors interested in the sale then included GDF Suez SA, Kulczyk Holding SA, CEZ AS, Energeticky a Prujmyslovy Holding AS and Polskie Gornictwo Naftowe i Gazownictwo SA.

The government has already failed twice to sell Enea, its third-largest utility, after holding talks with RWE AG in 2009 and Electricite de France SA in 2011.

Energa has a 17 percent share in the Polish regulated distribution market, compared with a 3 percent share in the power generation market. Its earnings before interest, taxes, depreciation and amortization, or Ebitda, rose 21 percent to 1.07 billion zloty in the first six months of 2012 from a year earlier, according to its website.

PGE is valued 4.5 times Ebitda for the last 12 months, according to data compiled by Bloomberg. Tauron’s enterprise value, or stock-market capitalization plus debt and minus cash, is 3.6 times Ebitda, while Enea trades 3.1 times Ebitda.

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