Poland Raises Record $1.68 Billion in PKO Bank Stake Sale

Poland raised a record 5.24 billion zloty ($1.68 billion) from the offering of PKO Bank Polski SA, its largest lender, selling a bigger stake than planned on “high” demand.

The Treasury Ministry and state-owned Bank Gospodarstwa Krajowego sold 153.1 million shares, or a 12.2 percent stake in PKO at 34.25 zloty apiece, the ministry said on its website late yesterday. The government’s holding fell to 31.4 percent, while BGK sold its entire 10.2 percent stake in the biggest share offering by a publicly traded company on the Warsaw Stock Exchange.

Poland is selling assets to curb public debt and finance state investments. The Treasury Ministry yesterday started a sale of a 25 percent stake in Warsaw-based property company Grupa PHN SA in an initial public offering. Other share sales this year may include utility Energa SA and insurer PZU SA.

“The transaction is positive as it will further improve PKO’s free float,” Marta Czajkowska-Baldyga, an analyst at KBC Securities in Warsaw, said in a note today. “The potential share overhang is limited to 6.39 percent” as the ministry plans to lower its stake to 25 percent.

Shares Climb

PKO shares climbed 0.9 percent to 35.07 zloty as of 1:13 p.m. in Warsaw, after falling 1.5 percent to a seven-week low at the close yesterday. The WIG20 Index fell 0.1 percent today.

The stock’s weighting in the benchmark WIG20 Index may be increased to the 15 percent limit from the present 13.2 percent in an extraordinary rebalancing in the next few days, Bank Zachodni WBK SA’s brokerage said in a note today.

The transaction comes six months after the ministry sold 7.6 percent of PKO at 32.5 zloty each. Poland pledged not to sell more PKO shares within 180 days, it said in an e-mailed statement today.

The government sold 67 percent of the offered shares to Polish investors, mainly pension and mutual funds, 24 percent to U.K.-based buyers, while about 6 percent to U.S. funds, the ministry said in an e-mailed statement today.

Citigroup Inc., Deutsche Bank AG, PKO were global coordinators of the sale. Credit Suisse Group AG, Espirito Santo Investment Bank, Goldman Sachs Group Inc., Ipopema Securities SA and Societe Generale SA were joint bookrunners.

PKO trades 1.83 times its book value, above the industry’s average of 1.55 in eastern Europe, according to data compiled by Bloomberg. Its profit last year was “near” its record 2011 result of 3.81 billion zloty, Chief Executive Officer Zbigniew Jagiello said on Jan. 4.

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