Energa Drops in Debut After Biggest Polish IPO Since 2011

Energa SA, Poland’s third-biggest utility, fell on its first day of trading in Warsaw after the government sold a 2.4 billion-zloty ($791 million) stake in central Europe’s largest initial public offering in two years.

The shares plunged as much as 10 percent and closed 5.4 percent lower at 16.09 zloty, valuing the Gdansk-based company at 6.66 billion zloty. The government sold a 34.2 percent stake in the IPO at 17 zloty a share, cutting its holding to 50 percent. Energa employees own 15.8 percent and were allowed to sell their shares as of today, according to its IPO prospectus.

“Our employees are probably among the investors selling shares today,” Chief Executive Officer Miroslaw Bielinski told reporters in Warsaw. “They’ve been waiting for this moment for about 10 years.”

Energa’s IPO was the biggest in central Europe since Polish coal producer Jastrzebska Spolka Weglowa SA’s 5.37 billion-zloty sale in 2011, according to data compiled by Bloomberg. Energa joined other Polish companies including railway unit PKP Cargo SA, train maker Newag SA and developer Capital Park SA selling shares to the public in past months.

State Sales

Over the last five years, Poland has sold stakes in Energa’s competitors including PGE, Tauron Polska Energia SA, Enea SA and ZE PAK SA, gaining funds for financing the budget deficit and curbing public debt growth. After Energa’s sale the government’s revenue from asset sales rose to about 4.6 billion zloty this year, compared with its target of 5 billion zloty.

The government has “no need” to sell more shares in state-controlled companies on the bourse this year and may offer further stakes in the future, Deputy Treasury Minister Pawel Tamborski said in an interview in Warsaw today.

Sales of state-owned stakes next year may include chemical producer Ciech SA, copper maker KGHM Polska Miedz SA, property developer Grupa PHN SA, PKO Bank Polski SA and power utilities, Bank Zachodni WBK SA said in a research note on Dec. 9

Energa, which makes most of its profit from a regulated power-distribution business, boosted its nine-month earnings before interest, taxes, depreciation and amortization 13 percent to 1.5 billion zloty, it said on Oct. 25. Net income climbed 15 percent from a year earlier to 610.8 million zloty.

JPMorgan Chase & Co. and UBS AG were global coordinators and joint bookrunners of the IPO. Citigroup Inc., PKO Bank, UniCredit SpA, Banco Espirito Santo, Bank of America Merrill Lynch, Ipopema Securities SA, BRE Bank SA, Bank Ochrony Srodowiska SA and Alior Bank SA also helped manage the sale.

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