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| Warsaw Business Journal’s daily news update | Tel.: (+48 22) 639-85-67/68, Fax: 639-85-69 |
| Top Story | Kraft sells Wedel to Japanese firm |
| Business | BZ WBK sale officially underway |
| International | Expensive franc raises credit rates |
| Stock Watch | Hungarian banking giant eyes WSE |
| Domestic | Train passengers will pay for new stations |
| Real Estate | Interbud-Lublin book building underway |
| Kraft sells Wedel to Japanese firm | | In a stunning move, American food giant Kraft is selling Wedel, Poland's biggest confectionery maker, to Japan-based Lotte. Rzeczpospolita reports the transaction could be worth as much as zł.800 million. The sale comes as a surprise to analysts and competitors, who were expecting American chocolate producer Hershey to step in and buy the firm. Others felt Wedel could go to Nestle, or to Poland-based Jutrzenka. The biggest surprise comes from the fact that Lotte, a Japanese sweets and chewing gum manufacturer, is virtually unknown in Poland. "We don't know this firm and don't know what its strategy will be on the Polish market," says Dariusz Orłowski, president of competing Polish chocolatier Wawel. According to research firm Euromonitor International, Lotte is among the world's top 25 producers of packaged foods and has capital ties to Hershey. Three years ago, the two firms started a joint venture in China. Kraft is keeping mum on the transaction details, but the Wedel brand was valued at zł.713 million last year, a year the brand got the "strongest sweets brand in Poland" honor for the fifth straight year. Kraft Foods bought Wedel, along with its British owners Cadbury, for some zł.60 billion. The EU forced Kraft to sell the company to prevent a monopoly in the market. (Rzeczpospolita - p B1) L.B. |
| BZ WBK sale officially underway | | Rzeczpospolita reports PKO Bank Polski is officially buying fellow bank BZ WBK from Irish firm AIB. But analysts say the bank won't be financing the purchase with a new shares issue. Instead, PKO is expected to issue bonds to help pay for the deal. The entire 70-percent share packet of BZ WBK is estimated to be worth some zł.10 billion. Analysts like the way PKO is looking to pay for the deal, since a bond issue allows for raising capital without introducing new shareholders. Last year, the bank made some zł.2.3 billion, but questions around a PKO dividend remain unanswered for the moment, as the Ministry of the Treasury, the bank's principal shareholder, has decided to defer its decision on the payout for one month. (Rzeczpospolita - p B4) L.B. |
| Lotos hunts for new oil deposits | | Lotos, Poland's second-largest oil refiner, has the chance to become the owner of a new oil deposit on the Norwegian shelf, reports Rzeczpospolita. The company is refusing to talk specifics, keeping mum on such details as how much oil is found in the deposit, or even with whom it is negotiating the sale. But it's no secret that increasing its oil deposits is one of the company's most important long-term strategic objectives. Lotos is looking to own some 2 million tons of oil pumped from its own deposits within six years. (Rzeczpospolita - p B6) L.B. |
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| Less than 1,000 Tauron shares each | | Yesterday, Poland's Ministry of the Treasury assigned individual investors some 205 million shares of Tauron. That makes up 25 percent of the public offer, with institutional investors taking the other 615 million. Each individual investor was able to buy a maximum of 934 shares for zł.4,790. At the time of subscription, individual investors were eligible for 8,400 shares, but those were then scaled down 9:1. The Treasury ended up selling 51.6 percent of Tauron in the IPO for zł.4.2 billion. It continues to hold 34 percent of the group's shares.(Rzeczpospolita - p B5) L.B. |
| Enea privatization underway | | Yesterday, the Ministry of the Treasury began soliciting interested buyers of Enea, the country's third-largest energy concern. Up for grabs is a 51-percent share packet worth some zł.3.96 billion. Investors have until July 27 to make non-binding offers, but nobody is jumping at the deal so far. German electricity firm RWE nearly bought Enea in 2009, but has already decided not to participate in this purchase. "We won't be taking part in these negotiations," says Iwona Jarzębska, Polish spokesperson for RWE. "We have a chance to participate in the privatization last year, but we were unable to present a satisfactory offer." RWE continues to be interested in a Polish expansion. Sweden's Vattenfall could be interested in the deal, but is taking its time in making any offers. Analysts expect Poland's gas monopoly PGNiG will be watching this deal very closely.(Parkiet - p. 4) L.B. |
| Vistula promises to end Q2 in the black | | Polish men's clothing company Vistula says May and June were both strong months for sales. "We are seeing a slight strengthening in the clothing and jewelery markets," says Vistula president Grzegorz Pilch. "We will finish Q2 in the black." Still, Pilch fails to provide any solid numbers. Vistula sells its products under the brand names Vistula, Wólczanka, Deni Cler and W. Kruk. In Q1, the firm made 56,000 in net profits on sales of zł.76.5 million. Company executives maintain the firm is on track to reach its goal of zł.28 million in net profits at the end of the year. (Parkiet - p. 5) L.B. |
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| Alma Market: recovery on track | | Alma Market, operator of a chain of retail delicatessen across Poland, says its numbers continue looking better as 2010 goes by. "In Q2, our sales slowed slightly, but we should still see growth of about 18 percent," says Alma president Jerzy Mazgaj. The firm had a phenomenal first quarter, posting a sales jump of some 26 percent to zł.287.7 million. Despite rising revenue, the firm still saw net losses of some zł.4.5 million, but that's still a good recovery from Q1 of 2009, when the firm lost zł.9.7 million. Mazgaj says it's hard to tell whether the firm will emerge into the black after Q2, but he's confident that goal will be reached before the end of 2010.(Parkiet - p. 5) L.B. |
| Complex goes shopping | | Complex, Polish producer and supplier of roller bearings and bearing sleeves, continues on its restructuring path. The effects of the changes should bear fruit before the end of the first quarter of 2010, say executives, especially when compared to 2009 numbers. In the first half of 2009, Complex lost zł.0.9 million on zł.52.5 million of sales. The firm continues to expand its operations. It's currently in negotiations with two private firms, whose eventual purchases w0uld complement current Complex operations. The company is also in talks with the Treasury around the purchase of a state-owned producer of luggage and camping trailers. (Parkiet - p. 6) L.B. |
| Bumech: Treasury wanted too much | | Bumech, a Polish company specializing in the repair of mining machinery and equipment, was not successful in its bid to buy more than 93 percent of machinery producer Kofama. The firm was one in a long list of those the Ministry of the Treasury is looking to sell off to help Warsaw deal with its public debt, but Bumech says the Treasury wanted too much for Kofama and rejected Bumech's highest offer. A consortium of firms that included Bumech offered zł.4 million for Kofama, reports Parkiet. (Parkiet - p. 6) L.B. |
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| More operators enter TV market | | Another group of telecoms is looking to enter Poland's digital television market, reports Parkiet. Netia will be among the newcomers joining Telekomunikacja Polska and Dialog in offering television service. TP and Dialog have long been working on the expansion of their digital platforms to include TV. The former started in 2006. At the end of March 2010, TP had 417,000 subscribers, which would indicate some 130,000 new customers every year since the program launched. TP is hoping to top 1 million customers by 2012, but analysts say that won't be easy with a number of new players looking to share the digital TV pie.(Parkiet - p. 7) L.B. |
| 200 new drugstores coming to Poland | | Cosmetics distributor Polska Grupa Drogeryjna, a subsidiary of Eko Holding, is launching a chain of 200 new drugstores across Poland. The ambitious plan would see the project complete before the end of the year. The new stores would be operating under the brand Jasmin, but this is not a project that's starting from scratch. Instead, PGD is approaching the country's independent drugstores and asking them to enter into a franchise agreement, which offers a central marketing strategy and integrated computer systems. (Puls Biznesu - p. 9) L.B. |
| Expensive franc raises credit rates | | Poles holding lines of credit in Swiss francs had reasons to despair yesterday, as the currency climbed to highs unseen against the złoty in 15 months. In afternoon trading, one Swiss franc was worth zł.3.12. Bank exchange rates were even less favorable, some trading the currency for as high as zł.3.20. Rzeczpospolita reports that's bad news for those holding credits in the foreign currency, since its rising strength means the monthly rates of repayment have shot up. For example, a loan of zł.300,000 taken out at 1.5 percent interest in 2007, when one franc was worth zł.2.37, now translates to a monthly payment of zł.1,446. Just two months ago, when the franc was trading at zł.2.64, that same monthly payment would have been zł.200 cheaper. (Rzeczpospolita - p B1) L.B. |
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| Thrifty European neighbors should buy groceries in Poland | | According to last year's Eurostat data, Poland offers the cheapest groceries (excluding alcohol) in the European Union. Leading the list of expensive groceries is Denmark, followed closely by Ireland and Finland. Assuming an average of 100 points for grocery prices in the 27-nation union, residents and visitors of Denmark pay 39 percent more. Poland, on the other hand, offers those groceries at a 36-percent discount, making it even cheaper than the most recent newcomers to the EU, Bulgaria and Romania. Vodka is the most expensive in Finland, where it sells at a 70-percent premium compared to the European average. The priciest cigarettes are found in Great Britain, where a pack costs 66-percent more than the European average. (Rzeczpospolita - p B2) L.B. |
| Little interest to woo Chinese tourists | | Rzeczpospolita reports Poland's travel agencies aren't interested in wooing Chinese tourists to visit the country, despite China's growing economic might. Last year, just 19,000 Chinese visited Poland. Of that number, just 300 were tourists. That pales in comparison to Poland's closer neighbors: 4.6 million Germans made the quick trip east, 450,000 Brits came to visit, as did 215,000 French and 175,000 Czechs. That's largely because the Polish Tourist Organization spends very little on promotions in China. Out of this year's advertising budget of zł.38 million, just zł.375,000 is going to China. (Rzeczpospolita - p B6) L.B. |
| Silvano Fashion focuses on Russia | | WSE-listed lingerie maker Silvano Fashion will pay shareholders zł.0.20 per share in a dividend, reports Parkiet. That's a total payout of zł.8.1 million. The Estonian firm surprised analysts with deciding for such a high dividend at its general meeting, given that the firm lost zł.3.7 million last year. But company executives don't see anything alarming in those numbers. Baiba Gegera, the firm's financial director, says Silvano still has some zł.7.4 million for future investments, even after the dividend is paid out. The group will focus its expansion efforts on the Russian market. Yesterday, the company's stock jumped 3.4 percent to zł.6.69 per share.(Parkiet - p. 5) L.B. |
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| Hungarian banking giant eyes WSE | | Hungary's largest bank is looking to enter the Warsaw Stock Exchange. Parkiet reports that OTP, currently listed in Budapest, is even looking to be listed on the blue-chip WIG20 index. OTP representatives are in Warsaw, visiting with Polish investment funds. "We're seeing a growing interest in our bank among Polish investors," says Sandor Pataki, a spokesman for OTP. "That's why we showcase our bank in Warsaw from time to time." Pataki doesn't want to reveal any time line or details of the deal, nor whether the company will emit new shares when it makes its debut. Analysts value the firm at some zł.20 billion.(Parkiet - p. 1) L.B. |
| Opteam settles for low end of price spread in IPO | | IT firm Opteam has decided on a price for its shares issue preceding its public debut on the WSE. The firm will sell 1.4 million D-series shares for zł.5.44 apiece in its upcoming IPO, a price that's near the bottom end of the spread outlined in the book building process. "The issue price is a compromise between what we wanted and the demands of financial investors," says Opteam president Janusz Bober. He says nine institutions have already expressed interest in the company, with particular attention paid to subsidiary Polskie ePłatności, a firm that's looking to make waves in Poland's smart card market. (Parkiet - p. 7) L.B. |
| Train passengers will pay for new stations | | A number of train stations across Poland are getting overhauled, but Rzeczpospolita reports train operators won't be the only ones paying for the upgrades. After improvement fees come into effect, operators will pay between zł.1.5 and zł.33 to stop their trains at the new stations. Analysts expect they will try to dump at least a portion of that cost on passengers in the form of more expensive tickets. (Rzeczpospolita - p B3) L.B. |
| Strike votes underway at KGHM unions | | The two largest labor unions at KGHM Polska Miedź, one of the largest producers of copper and silver in the world, have asked their members to vote on whether a strike is the right move in an ongoing labor dispute with their employer. The unions are demanding wage increases and job security for 20 years for their members, the latter a guarantee in case KGHM ever privatizes completely. The Treasury currently owns 32-percent of the firm.(Rzeczpospolita - p B4) L.B. |
| Interbud-Lublin book building underway | | According to the company's portfolio of orders, builder Interbud-Lublin is guaranteeing at least zł.100 million in revenues, with another 35 million coming from the firm's development operations. The firm's executives say Interbud is on track to meet its 2010 financial goals of zł.15 million of net profits on revenues of zł.170 million. The firm is negotiating new contracts worth as much as zł.10 million as it gets ready to make its WSE debut.(Parkiet - p. 6) L.B. |
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| Saturday July 3. One day only. |
| AmCham 4th of July Picnic |
The American Chamber of Commerce in Poland celebrates US Independence Day with a picnic at Królikarnia Palace in Warsaw. By invitation only |
| Location: | Królikarnia Palace, ul. Puławska 113A, Warsaw |
| Organiser: | AmCham |
| Contact: | www.amcham.pl |
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| Wednesday July 14. One day only. |
| CCIFP Bastille Day Ball |
The French Chamber of Industry and Commerce (CCIFP) celebrates Bastille day with its annual ball. WBJ's special supplement on France will be distributed at the event. |
| Location: | Endorfina restaurant, ul. Foksal 2, Warsaw |
| Organiser: | CCIFP |
| Contact: | http://www.ccifp.pl |
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| Monday July 26. One day only. |
| Arabian Horse Days - Poland 2010 |
The annual Arabian Horse Days horse show. |
| Location: | Janów Podlaski Stud |
| Organiser: | Pride of Poland |
| Contact: | http://www.prideofpoland.pl/en |
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